Your First Credit Card
Getting a credit card is an important step in life. However, before applying for the first card you see, here are some things that you should know.
When should you get your first credit card?
Though it may sound silly, the best time to get a credit card is before you need one. Consider getting a credit card during college or shortly after graduation. If you have already graduated, there are many credit cards that are great for young professional. Before applying for a credit card, understand the credit requirements and choose a card that offers a strong chance of approval.
How to get your first credit card
If you have a full-time job, it will be easier to find a credit card. For a first credit card, stick with card intended with fair credit. If you know your credit is good, you can apply for a card intended for people with good credit. However, if it is your first credit card, it is unlikely that you will get approved for a card that requires excellent credit.
Getting a credit card with no credit history
You need a credit card to build credit, but you can’t get one without credit history. It’s a bit of a catch-22. Visit the bank where you have your checking account and talk to someone about your lack of credit history. Inform them that you would like to start building one with a credit card. You will most likely get a secured credit card through this.
What’s the difference between a secured and unsecured credit card?
A secured credit card works much like a debit card but helps you build your credit. Secured credit cards are backed by a cash deposit. This is typically equal to the card’s limit and acts as collateral. Because secured credit cards are backed by a cash deposit, it removes the risk of non-payment.
An unsecured credit card is not backed by a cash deposit or any other form of collateral. When accepted for an unsecured credit card, you’ll receive a credit limit based on your income level and credit history. It’s likely that your first card’s limit will be low.
Why should you get a credit card?
Building your credit is very important. Good credit helps you get future loans at favorable rates, like for a mortgage. It can also help you get approved for an apartment, avoid utility deposits, and get lower insurance premiums. Additionally, many cards offer different rewards, such as cash back or travel rewards