How to apply for your first credit card

Category: Credit Cards

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If you’re looking to establish your credit, one of the first steps that most people will take is to apply for a credit card. Applying for first your credit card can be exciting, but as someone who is unfamiliar with credit cards, it can also be easy to make mistakes during the process. Additionally, because credit applications will result in hard inquiries (which affect your credit score), it’s important to apply for the right credit card—not just any offer that you receive in the mail. As you get ready to apply for your very first credit card, keep the following in mind:

Become an authorized user

If you haven’t done so already, find out if a parent or other family member with great credit is willing to add you to one of their credit card accounts as an authorized user. You don’t need to use the credit card or even have access to it, but by simply being added onto the account, you can piggyback onto that other person’s credit. If you can do this, wait a while before you apply for your first credit card, because it will help you establish and build up your credit a bit. Because your credit won’t be brand new when you do apply for your first credit card, you not only improve your chances of getting approved, but you might qualify for a card with better terms.

Look into introductory offers

If you’re applying for your first credit card, try to get one that has a low-interest (or no interest) introductory offer. You’ll also want to take note, however, of what the interest rate will increase to once the introductory period is over. You want to make sure that the rate is reasonable, and not extraordinarily high.

Compare offers

You might be getting a lot of credit card offers in the mail, but it’s important to not just pick one randomly or apply for the first one you receive. Compare these offers to determine which one is the best one for you, in addition to looking online at different credit card programs that are ideal for those applying for credit cards for the first time.

Understand what the payments would be

Before applying for your first credit card, understand before applying what your minimum required payments would be each month and make sure you have the financial means to support those payments. If it would be a struggle to factor those monthly minimum payments into your budget, you might want to move on and find a different credit card. You’ll ideally want to pay more than the minimum required payments as well, so that you can avoid paying more money in interest and accumulating a lot of credit card.

Look at the terms and conditions carefully 

Someone new to credit cards can easily overlook this step when finalizing their decision about the first credit card they want to apply for. For example, you might think you’re applying for a credit card with a specific interest rate, but it’s actually an introductory offer and the rate will skyrocket when that period is up. Or maybe the credit card you’re considering imposes other fees you aren’t aware of, such as an annual fee. Every credit card program comes with its own set of policies, fees, and other terms, so it’s important to be aware of them before you apply.

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Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.

Tags: applying for credit, establishing credit, interest rates, monthly payments

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