It helps you determine when the filters need changed. TDS coming out should always be zero. If you purchased it new, I doubt that's the issue. Unless you've been filling your swimming pool with RODI [emoji12]
I agree that the API test kits can be wonky, but if you do have ammonia with fish already in the tank water changes are the best way to manage it. Your tank will still cycle with water changes...it just takes a bit longer.
It might be a good idea to take a sample into your LFS to double check, and grab one of those alert badges. I've found them to be pretty reliable.