How to Get Your First Credit Card: A Complete Guide

If you are prepared to apply for your first credit card, you should be commended for conducting research prior to agreeing to the very first credit card offer you are presented with. There isn’t a standard format for credit cards. 

Even among beginner credit cards, there is a wide range of conditions and features. The following information will assist you in selecting the right card that is most appropriate for the circumstance at hand.

Check Your Credit History

When you are attempting to find out how to apply for your very first credit card, it could be good to have a look at your credit rating and history as soon as possible in the application process. When you have a solid understanding of your credit record as well as your credit rating, you will have a better sense of the credit cards for which you might be eligible. 

Your credit rating can be accessed with the use of a service that is available online. AnnualCreditReport.com is another place where you may acquire a free copy of your credit report.

Consider a Starter Credit Card

If you are over the age of 18, you are not required to ask your parent or guardian for assistance if you do not wish to do so. If you have a limited or nonexistent credit record, however, credit card companies do not have any method of determining whether or not you will be responsible for the debt you incur. 

Because of this, they are only able to provide you with their “safe” options, which may not be very interesting to you. However, by using these cards responsibly, you can improve your credit standing and qualify for higher credit card products.

Credit cards for students, people with bad credit ratings, the unemployed, and others in similar situations are all available. Be aware, however, that a significant number of credit cards aimed specifically at persons with poor credit do not offer terms that are to your advantage. 

For example, there is no reason to pay an annual fee for a credit card if the card does not offer any incentives, and this is especially true if the card is secured, which means that you had to pay a deposit in order to apply for it.

Get Pre-Approved

Pre-approval or pre-qualification for a card is another wonderful approach to increase your approval odds without negatively impacting your credit rating through excessive hard queries. 

In spite of the fact that these two kinds of offers are distinct from one another in a few important respects, the fact that you have been extended either of them usually indicates that you have satisfied the preliminary requirements necessary to obtain a credit card.

Before submitting an application for a credit card, you are able to find out whether or not you are pre-approved for certain of the cards through the use of an online pre-approval service. It is a quick process that requires only some fundamental information. And because it simply requires a mild query, checking it won’t have any negative impact on your credit ratings at all.

Compare Different Reward Options

Even once you have determined the category of credit card you believe would serve your needs most effectively, you should still investigate the various possibilities available within that category. 

Because each credit card issuer provides their customers with a unique set of benefits, it is in your best interest to compare the many offerings available on the market until you discover the combination of features that meets your needs.

For instance, if you enjoy traveling quite a bit, you should look for a credit card that provides excellent travel benefits and advantages, such as complimentary access to airport lounges and room upgrades at participating hotels. 

If you are a frequent traveler, you should avoid getting a credit card that comes with additional fees for making purchases made in a foreign country. If you don’t do much traveling, the everyday privileges that come with having a credit card can be more beneficial to you.

While you are looking at several credit cards, you should think about which incentives will be most beneficial to you. Do you prefer a credit card that allows you to rack up points and miles or one that gives you cash back on your purchases? 

Do you prefer a generous sign-up bonus to a promotional period during which your annual percentage rate (APR) is 0%, which might save you money on interest payments? What about insurance for your telephone, protection against travel accidents, or primary coverage for your rental car? 

Using the appropriate credit card can truly help you earn as you spend, so you should give serious consideration to the features that will be of the most advantage to you.

Submit Your Application

The procedures for applying for credit cards can differ from one card issuer to another. Make sure you’re ready to reveal sensitive personal data, such as your Social Security number, work status, and income. Credit card companies may use this data in conjunction with your credit rating to determine your eligibility for a credit card.

There are several ways in which credit cards can be useful, including the opportunity to establish or improve credit, the peace of mind they afford, and the convenience and monetary returns they offer.

What to Expect Following Your First Credit Card Application

If this is your first time applying for a credit card, you probably won’t have much of a credit record to show for it. This indicates that a financial institution may be selective about the sum of a credit line it extends to you as well as the benefits it provides to you.

Even if you can’t get every cardholder perk you desire with your very first credit card, you still have options for cards with low or no annual fees. You can also improve your chances of receiving additional credit by engaging in responsible behavior when using the product.

Additionally, it is recommended that you select a credit card issuer that provides customers with a variety of credit card options. After you have established your credit record, you may be eligible to move to a card issued by the same issuer that has a higher credit limit and provides you with additional perks.

How to Use Your First Credit Card Wisely

The way a person handles their first credit card can have a significant impact on their credit rating. In order to keep your finances in order and your credit card usage in check, please consider the following.

• Always be prompt with your payments. Regardless of the type of credit card you apply for, your disbursement history will play a large role in determining your creditworthiness. For example, 35% of your credit rating is based on your payment history according to the FICO® credit scoring model.
  
  Also, it’s not just your credit rating that suffers when you don’t pay your bills on time. They can also cause interest rate hikes or late payment fines.
  
  If you make at least the minimum payment on your credit card bill each month, you can keep your account from being charged late fees and remain in good standing with your card issuer. Keep in mind that interest will be accrued on your balance if you don’t pay it off in full each month.
  
  Automatic payments are an additional convenience offered by some credit card providers. A monthly payment of your choosing will thereafter be processed on the due date of your account. It’s a good approach to avoid missing deadlines unintentionally.

• Maintain a low balance on your account. If you want to raise your credit rating, it’s not enough to simply pay your bills on time each month; remaining within your credit limit can have a similar effect.
  
  Because of something called the credit utilization ratio, or the percentage of your total credit that you are actually utilizing. Experts recommend using no more than 30 percent of your available credit to help keep your credit rating in the healthy range, according to the Consumer Financial Protection Bureau.
  
  Maintaining a low sum may also make it easier to pay off your card in full each month. That way, you may build a positive credit record with consistent payments and avoid paying any extra fees or interest.

• Always use a budget plan. Building a workable budget is one approach to keep from taking on more financial obligations than you can comfortably handle.
  
  One easy way to get a sense of where your money is going is to examine your credit card statements. After you’ve covered mandatory outlays, such as rent or the mortgage, you’ll be in a better position to choose how much discretionary spending money you can devote to things like entertainment or dining out.
  
  Still, credit cards can be valuable instruments. Make sure you can afford the bare minimum payment. You can also prevent interest by paying down your debt in full every month.

• Verify your receipts and bills regularly. If you want to keep your credit card account and credit rating in good standing, reviewing your monthly statement is a must. There are a number of things, including spending, payment date, and unauthorized purchase information, that can be found on your statement.
  
  To help you keep tabs on your account, certain card issuers, like Capital One, have features that provide you rapid notifications of purchases and fraud alerts.
  
  If you discover an unauthorized charge on your credit card, contact the company immediately. Faster action to stop theft or misuse of funds is possible if fraud is reported quickly.

• Know the fees your credit card may charge you. Knowing what kinds of fees could be added to your monthly credit card bill is a smart idea. Typical credit card fees may include the following, although they may also include others.
  
  • Late fees. There may be a late fee if you don’t pay by the specified date.
  • Foreign exchange fees. A tiny percentage fee may be applied to transactions made while abroad.
  • Balance transfer fees. Some credit card companies charge a fee if you move a balance from one card to another. Either a flat rate or a percentage of the sum transferred could be used to determine the fee.
  • Cash advance fees. Credit card cash advances are subject to fees from some issuers, who may charge a flat rate or a percentage of the sum borrowed.
  • Annual fees. There may be an annual fee for using some cards. If this is the case, issuers will typically charge your account once per year.

For details on the fees associated with using your particular card, please refer to your cardholder agreement.

• Make regular use of your card. Using your card regularly can help you build a positive payment history. And because some financial institutions deactivate accounts after a period of inactivity, this can help keep your card operational.
  
  Credit card use also has the added security of fraud protection offered by many card issuers, making it a more reliable payment option than cash. In addition, a monthly statement will be sent to you detailing all of your transactions.

What Should You Do If Your Credit Card Application Was Denied?

You should get ready for the possibility that your request for a credit card will be denied the first time you submit it or perhaps the first few times. Even applicants with impeccable credit histories can have their applications denied occasionally.

Be aware that if your application is unsuccessful, you will be sent a letter detailing the reasons for the denial (known as an adverse action notice). You can determine what steps to take next by referring to the information contained in this letter. 

It’s probable that you need to either transfer to a new credit card or start building your credit record with a secured card. Both of these options are available to you.

Bottom Line

When you receive your first credit card, it’s an exciting time in your life, but you want to make sure you pick one of the best starter cards on the market. Find a company that offers you conditions that are satisfactory and assists you in obtaining terms that are favorable given your current credit status and the options available to you.

In addition, after you have the card in your possession, it is imperative that you continue to demonstrate good credit activity. In the years to come, you won’t be able to thank yourself sufficiently for what you’ve done.