Advertiser Disclosure

Sound Advice for a New Credit Card Holder

My college-sophomore daughter just got her first credit card. Along with it came some fatherly advice.

Dear Zoey:

Congratulations on entering the world of plastic money. Just remember to handle your new card with care!


  • Use your card sparingly but at least several times a month for purchases you know you can afford.
  • Set up an online payment account through the credit union account you have at school.
  • Pay off the entire balance every month at least a week before the due date on your statement.
  • Make sure the transaction goes through.

If you do this carefully and continually, you will be able to build a good credit history and what’s more, it won’t cost you a dime.

Watch for Credit Card Add-Ons

Of course, you will be a net loss to the card issuer, because you won’t be paying any interest or fees on the charges you make. Credit card companies hate that. So you will soon become a target for all sorts of add-ons and unnecessary programs that your card company (Discover) will attempt to lure you into buying.

Don’t do it! Not only do you not need them, there’s a good chance they won’t come through as promised, anyway.

In fact: In January 2012, Discover Financial Services settled a $10.5 million class-action lawsuit that charged that it deceived its customers into signing up for a whole bunch of useless, fee-based products – Discover Payment Protection, Identity Theft Protection, Wallet Protection, and CreditScore Tracker.

In some cases, customers were enrolled in various products without their consent, and/or they were charged ridiculously high fees and then denied the benefits that these programs were supposed to offer.

All Credit Card Companies Target Consumers

It’s safe to assume Discover is not alone:

  • In April, Chase credit card customers won a $20 million class-action settlement for the same deceptive practices.
  • In July, a federal judge approved another $20 million settlement for Bank of America customers.
  • And in the same month, Capital One (the card your mom and I use) was ordered to Pay $210 million to over 2 million card-holders who were similarly tricked into buying unwanted, add-on products, in the first public enforcement case of the new Consumer Financial Protection Bureau.

So if you ever get a call offering a credit card service “for free,” politely hang up. And when you start getting pieces of mail from any credit card issuer – once you establish good credit, they’ll all be trolling for your business – let me know before you agree to anything.

While your mom and I trust your good sense, there are a lot of predators out there, so be smart. Together, you and I can beat them at their own game.

Finally, if you do get behind and can’t pay off your balance in a particular month, don’t be embarrassed. Just text me and I’ll send you a check – interest-free and no strings attached. I’ll put it on your tab and maybe you can work it off on Winter Break.

Have a great semester.

Love, Dad.

P.S. – Don’t forget to Skype your mother.

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].


2 Minute Read

Table of Contents
    Add a header to begin generating the table of contents

    Home > Blog > Sound Advice for a New Credit Card Holder