How to Get a Credit Card for the First Time

A credit card gives you instant access to a loan. Although the interest rate and fees on a credit card can be significant, a good credit card is a very important part of a good financial plan. If you have never had one before it may not be clear how you can get one. Read on to learn more about how to get a credit card for the first time.

How to Get Your First Credit Card in 5 Steps

The process of how to get a credit card for the first time is not too complicated, but it is different than getting a debit card. The section below will help you to understand the steps involved.

1. Review Your Credit Report and Credit Score

An important consideration when applying for a credit card is your credit history. Your credit history shows all the formal loans you have had and how well you have paid them back.

The more good loans you have had, the higher your credit score will be. Your credit score is a single number that essentially summarizes your credit history. 

Your credit report is a more detailed breakdown of your credit history and allows you to see how various events affect your score.

Understanding your credit report and credit score will help you understand the kind of interest rate you should be expecting to be offered on your credit card and how credit card interest works. 

Generally, the better your credit score, the lower the interest rate you should expect to be charged.

Understand the Requirements for Getting a Credit Card

The simplest way to understand this difference between getting a credit card and a debit card is that a debit card gives you access to your money, but a credit card gives you access to the lender’s money. 

This is a risk for the lender. To manage this risk, the lender only gives credit card loans to people who have previously paid loans back on time. This information is recorded in a credit history. 

There is also another type of credit card called a secured credit card for which you do not need to have any credit history. A secured credit card can be used to build a credit history.

2. Compare Options to Find the Best Credit Card to Apply For

It is important not to automatically choose the easiest option. There is no guarantee that the easiest option will be in your best interest.

The best thing to do is compare credit card offers from various lenders. 

The list below shows a few features to look for that can help you choose a credit card:

1. Low annual interest rate
2. Generous repayment terms (e.g. zero interest for 3 months)
3. Low or zero annual fees 
4. Cash-back program
5. Reward program (e.g. reward points, airline miles)
6. Other benefits (eg travel insurance).

3. Make Sure That You’ll Be Approved

A few factors will determine whether you will be approved for a credit card. These are outlined below.

Credit History

If you have never had any kind of formal loan, then you will not have a credit history, and you will only be eligible for a starter-type credit card. These kinds of cards generally have the least favorable terms, but they represent a way to get a credit card without a history. 

Security

You can increase your chances of getting approved by applying for a secured credit card. This is a type of card for which you must provide a cash deposit. 

The deposit will be your lending limit and will be claimed by the credit card issuer if you fall behind on your payments. You get the deposit back when you close the credit card account. 

You don’t need a credit history for a secured credit card.

Number of Applications

Limit the number of separate credit card applications you make. If a lot of lenders begin looking at your credit history at the same time, it can harm your credit score. Only apply for a few cards that best fit your lifestyle.

Proof of Income

You will also need to prove that you have sufficient income to pay your credit card bill. 

For example, if you have a high enough income, but your rent and other expenses do not leave much extra, your chances of approval may be lower. 

4. Review and Understand the Terms and Conditions Before Applying

Finally, it is important to understand the terms and conditions of the various offers. Remember, a credit card gives you access to a loan, and that loan comes with a credit agreement. 

That agreement is a legal contract between you and the lender who is issuing the card, so it is important to understand what you would be agreeing to you if you sign.

5. Be Sure You’re Ready for Your First Credit Card

It is important to make sure you are ready to have a credit card before you get one.

A credit card is not an endless source of money. It is a loan and it must be paid back, sooner or later. Sooner is always better than later. You should generally pay the largest amount you can afford towards your credit card debt.

Because of this, you should have a steady source of income so you can pay off your credit card on time. 

Finally, you should make sure that you understand the best way to use a credit card to maximize your financial safety and protect your credit record.

If you are not ready to have a credit card, you can apply to be an authorized user of someone else’s credit card and build your credit history that way.

Key Considerations When Applying for Your First Credit Card

There are some important considerations to keep in mind when applying for a credit card for the first time. Some of these are listed below:

• Avoid predatory lenders. Read the terms and conditions carefully before applying.
• Ensure that you will have a steady income and no major expenses that would affect your ability to pay off your credit card.
• How old do you have to be to get a credit card? You must be older than 18 to apply for a credit card. Otherwise, you can only be an authorized user of someone else’s card.

Tips for Applying

The list below outlines some tips which should make it easier for you to get a credit card for the first time:

• Income: If you are between the ages of 18 and 21, you can list household income and assets that you have reasonable access to as part of your proof of income.
• Students: If you are a student you may qualify for a better deal than other people applying for their first credit card. Look for student-oriented offers with zero annual fees.
• Deposit: If you have no credit history, your chances are higher if you apply for a secured credit card. Use it to build your credit record. 
• History: Many services allow you to check your credit record for free. You don’t have to pay to check your credit report

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Final Thoughts 

The process of how to get a credit card for the first time is very different from a debit card. A credit card gives you instant access to a high-interest loan. It is important to compare credit card offers from different lenders and pick the one that gives you the most advantages.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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