Credit Card Tips for First Timers

When used properly, credit cards are valuable financial tools that can come to the rescue when you’re faced with an emergency. You can use for groceries, medical expenses, shopping and more. It also helps build or rebuild credit scores. But at the same, credit cards also have their downsides.

When you’re applying for the first time, it pays to weigh both the pros and cons of the financial tool. Also important is to choose which credit card product to go with. With a wide range of choices available in the market, choosing the best for your needs can be tricky. But this guide will help you narrow your options well.

Are you ready?

You just turned 18 which means you’re now legally an adult and you can finally apply for your first credit card. You might be very excited but hold your horses. Just because you’re old enough to get one doesn’t mean you qualify for a credit card. Remember that using a credit card can be a tricky business. You’re probably already familiar with the horror stories credit card users have shared over the years.

So before anything else, make sure that you’re actually ready for the responsibilities that owning a credit card entails. Don’t become another statistic that drowned in debt because you don’t know how to wisely use a credit card to your advantage. Plan ahead and thoroughly before applying for your first credit card.

Pre-application planning

When you’re a first time applicant, you’re often put at a disadvantage. Credit card providers aren’t always keen to approve applicants like you because you have no credit history yet.

Before you shop around and complete any application, one of the first things you should do is to check your credit score. You can do so for free at popular credit score service providers online. This way you’ll know exactly where you stand and gauge your chances for approval.

In addition to checking your credit score, understanding the credit card situation for young adults will also help. When you’re under age 21, for example, you may be required to have a cosigner and you must also have verifiable income to qualify. You must have either a part-time or full-time job to prove your steady source of income. If you don’t have any, another option is to ask someone, maybe your parent or any relative, to open a credit card joint account with you.

Choosing Your Card

If you’re sure that you’re ready for a credit financially and emotionally then the next step is to check your available options.

Credit card options in the market are wide and varied. There are offers for first timers that have 0% introductory periods. For these cards, you can charge purchases without any incurred interest for a specific time period. There are also options that are designed for people who have limited to moderate credit history. To get approved fast and easily, you should look for options that are tailored for your circumstance.

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Where to Apply?

There are many places to apply for a credit card. When you’re a first time applicant, the best places to look into include banks, retail departments and other major credit card issuers.

If bank is your first option, you are better off applying from one where you already have a checking or savings account. If you have a good financial history and you don’t have any overdrafts, your bank is likely to approve your application immediately.

Another good place to look into is a retail or department store. Compared to banks, these places have easier approval process but in exchange, they charge higher interest rate. If you have this card, make sure that you avoid carrying your balance from the previous month to the next as the interest can be steep.

Other than banks and retail stores, you can also go first to major credit card issuers in the country. If you’re a student, most providers offer student credit cards. This is a good place to start when you’re just starting out to build your credit history. Just make sure that you check the interest rates and annual fees before you complete an application.