A credit card isn’t free money. It’s a tool for building your credit history and managing purchases.

When you use a credit card, you’re borrowing money that you’ll generally need to pay back. Using your card responsibly can help you establish a credit history and build your credit score over time.

APR stands for Annual Percentage Rate.

It’s the interest rate used to calculate the cost of carrying a balance on your credit card.

If you pay your balance in full by the due date, you can generally avoid interest on new purchases during the applicable grace period.

Harvard FCU’s current Platinum Rewards terms state that purchase interest can be avoided by paying the applicable balance in full by the due date.

Good habit: Try to pay your statement balance in full every month.

A credit score is a number that helps lenders understand how you’ve handled credit.

Your score can affect your ability to qualify for loans and credit cards — and the rates you’re offered.

You don’t need perfect credit to start building credit. For many students, the first step is simply establishing a history of making payments on time.

Your credit limit is the maximum amount you can borrow on your card at one time.

For example, if your credit limit is $1,000, that doesn’t mean you should spend $1,000 every month.

Keeping your balance manageable and making payments on time can help you develop responsible credit habits.

Your minimum payment is the smallest amount you’re required to pay by your due date.

But there’s an important distinction:

Paying the minimum keeps your account from being considered late — but it doesn’t necessarily prevent interest from accumulating.

Best practice: When possible, pay your full statement balance by the due date.