Want to start building a credit history while getting more buying power? Use these tips to apply and get approved for your first credit card.

Are you trying to upgrade your purchasing power or build your credit history? Then it may be time to get a credit card.

7 in 10 Americans have at least one credit card. They form a normal and healthy part of many financial lives. But applying for a credit card isn’t risk-free. Done wrong, it could have a lasting impact on your financial health.

Here are 5 tips for applying for your first credit card the right way.

1. Understand Your Credit Score

If you’ve never owned a credit card, then you might not be too hot on what your credit score means — or even what it is.

But your credit score will have a huge impact on your life, affecting future credit applications and even your ability to rent a property.

Owning a credit card can be a good thing for your credit history. Clearing your debt on a regular basis will show you’re a responsible borrower. But if you let it get out of hand, you could tank your credit score and do serious, long-term damage.

If you don’t have a credit history, it can be tough to get a credit card in the first place. This review covers one of the possibilities for those without a credit history.

2. Take a Look at Charges

Not all credit cards are alike.

Different cards will have different interest rates — which is what that APR figure is all about. But they’ll also differ in their card charges. Some cards will charge an annual or monthly fee, for instance.

Others will only charge if you go over your spending limit. But whatever the case, it’s vital to know what these charges look like to retain control of your finances.

3. (Don’t) Take It To The Limit

When you take out a credit card, you’ll have a fixed spending limit. This is the total you’ll be able to borrow on that card.

But the key word there is “borrow”. You aren’t spending someone else’s money when you pay on your credit card. You’re borrowing from your own future.

Getting a new credit card can be an exciting time but don’t go crazy and max out the card. Your spending limit isn’t an objective, it’s a red line.

Keep your credit card spend low and make regular payments to reduce or clear your existing debt.

4. Read Your Statements

One of the best methods to control your finances is to understand them, and the best way to do that is to monitor your statements.

This is even more important when credit cards are in the picture. A credit card is a useful asset, but you need to stay on top of your spending to ensure you can make repayments and build your credit score.

5. Understand the Risks

Credit cards are far from risk-free, though they provide a great way to increase your spending power and boost your credit score.

Those risks can be significant, however. It’s a lot easier to run up credit card debt than it is to pay it off, so staying on top of your monthly repayments is vital. Not only that but falling behind on payments can do serious, long-term damage to your credit score.

Getting Your First Credit Card the Right Way

With these tips, you can get your first credit card and do it right. That’ll set you up for good financial health in the future — which can help you keep control of your life and personal happiness.

It’s never too late to upgrade your basic financial knowledge. Take a look at these financial lessons to test your knowledge.