Credit cards can be confusing. With so many different options, it can be hard to know where to get started. We’ve rounded up some of the most frequently asked credit card questions to help you get started.
If you’re interested in applying for a new credit card or just need some clarification, here’s a round-up of some common credit card FAQ.
Credit Card FAQ:
How is a credit card different than a debit card?
A debit card draws money from the bank account it’s associated with. This is your own money taken out as you would cash.
A credit card uses the money you’re borrowing from a credit card company for a fee. A percentage of interest is charged if you owe any money at the end of the billing cycle and you’ll have a credit limit in place.
How do I apply for a credit card?
To apply for a credit card, the process is pretty straightforward. You’ll be asked for a few pieces of basic information and the credit card companies take it from there.
How many credit cards should I have to build my credit?
While there isn’t a right or wrong amount of credit cards one person should have, building credit is based on a number of formulas. Having too little credit just means you need more time on your record and more accounts to show a history of good payments.
Having too much credit can be a bad thing if you’ve reached the top of your credit limit. Not using all of your available credit is a great sign to creditors that you can use your credit responsibly.
What does an instant approval or pre-approval mean?
When you apply for a credit card, you are either instantly approved, pre-approved or denied. If you have great credit and a high credit score, you may qualify for instant approval.
If you get pre-approved, it just means the credit card company needs more information before you can get officially approved or denied.
What age do you have to be to get a credit card?
In the United States, you have to be at least 18 years old to independently apply for a credit card. If you want to apply for your first card, you should find out what to do to get your first credit card.
People under 18 can be approved as an authorized user on an adult’s credit card, however. If a parent, for example, wants to give their 16-year old son, they can assign them as an authorized user on their account.
I don’t have any credit history, how do I get approved?
If you don’t have any credit, it may be harder to get approved but there are some options out there. This is a common problem with credit cards and something we all face at a young age.
You may be able to start with a secured credit card that requires a security deposit or be added to a parents account to get you started.
To find out more about your options and what credit cards may be available to someone without a credit history, check out this resource guide.
When you’re just starting out, you’ll also want to read up on the laws and regulations regarding credit. The government has some great resources available to help you educate yourself more on the process.
You can also download a free copy of your credit report every year to stay on top of your credit.
To learn more about good credit card companies, answers to your credit card FAQ and the most common credit cards on the market get started here.
Here are some other articles you might find interesting:
The Pros and Cons of Opening a Joint Bank Account
Are you Getting Your First Credit Card? Here are the Best First Credit Cards
Here’s How to Find Good Unsecured Credit Cards for Bad Credit
The Best Personal Loan Lenders for Unsecured Personal Loans