For many who never had the privilege of getting a credit card from their parents in high school like so many hashed out plots from ’80s teen comedies, you are most likely looking to get your first credit card.
Either you are just entering college or on your way out. It can be a daunting task learning how to get a credit card for the first time.
You may think applying for card after card is a good idea because a bank is bound to send you a card with rewards and perks any day, right?
There is a lot that goes into selecting and applying for a credit card, especially your first one.
Here are the things you need to know to get your first credit card. First, let us start with what to do.
Know Your Credit Score
Hold off on filling out that credit card application you got in the mail.
You need to first check out your credit score. A credit score is a number, on a scale of 300 to 850, that shows credit companies, banks, and lenders how trustworthy you are with repaying debt. A good credit score makes you more likely to be able to get a loan or a low interest credit card, while a bad one may require you to get a bad credit loan.
The lower the score, the least trustworthy you are seen as. Fair Isaac Corporation scores, or FICO for short, is the most well-known score used by credit companies.
The major credit reporting agencies are Experian, Equifax, and TransUnion. Each agency has their own scoring metrics, though they all are based on a 300-850 scale.
Your score can vary depending on which agency you choose to check your score.
Using Annual Credit Report, you can pull your score from all three agencies for free once every 12 months, or you can visit the sites for each agency directly and request a score directly from them.
Check what your score is before you begin applying for cards. Depending on the card you are eyeing, it may only be available to those with great credit scores.
Learn About The Different Types of Cards
Not every card is built the same way. As previously mentioned, some credit cards might only be exclusively available to those with credit scores in the 800s. But you should not feel discouraged as there are multiple ways you can still get your first credit card.
Department Store Cards
By far, the easiest way to get your first credit card is to walk into any department store and apply for a store card. Department stores – like Sears, JC Penney, Walmart, and Target, just to name a few – work with banks to offer customers credit.
There are downsides, however.
These cards usually come with a high APR rate, some starting at 19.99% and others reaching as high as 26%. Meaning, if you can’t pay your bill on time, you can expect the interest to rack up quickly.
You also cannot use the card outside of that specific store.
Secured cards might be your best bet in getting your first credit card. How it works is simple. You give the credit company a set amount and they give you a card secured with that money.
For example, if you give $100, you get a card with a $100 limit. Essentially, you are borrowing from your own money. After making on-time monthly payments for the time allotted – usually twelve months – you will be handed back your original money and given a line of credit.
Many banks offer student cards, which are available to those still in school. Most of these cards do not come with many perks, or at all in some cases. These are barebones cards meant to help build and establish credit for students.
Look for these types of cards but be sure to check if they come with any annual fees or high APR.
Don’t Forget About A Bank
If you have a bank account and have never over-drafted any of your accounts, you have a chance of getting approved for a bank card.
Chances are still high for getting rejected but if you have a great relationship with your bank, it does not hurt to try. Avoid applying online, instead head to your local bank and meet with a banker face-to-face.
Never Apply For Multiple Cards At Once
Applying for credit cards and getting rejected can negatively impact your score. Believe it or not but inquiries into your credit will drop your score ten to fifteen points.
You are going to get rejected for your first credit card, don’t sweat it.
When you do get rejected, use that time to apply for other credit cards that fit within your financial status. Applying for credit cards within the thirty days of getting rejected, any other inquiry into your credit will be affected once. Just be careful when using this approach.
Also, read the report you get in the mail for why you were rejected for a credit card. You can get an understanding of why you were rejected and what you can do to rectify it.
Don’t Be Afraid To Ask From Help From Your Parents
If all else fails, pick up the phone and ask your parents for help. There is no shame in asking to become an authorized user on your parents’ credit card account. This helps you build and establish credit without messing with your parents’ scores unless you decide to max out their card.
As an authorized user, you will be able to use their account to make purchases but you will not be on the hook for repayment when that bill comes.
How To Get A Credit Card For The First Time
Building and establishing credit comes down to one thing — patience.
Whether you are waiting for your rejection letter or trying to establish credit through a secured card. If you followed this guide correctly, you are on your way to getting your first credit card very soon.
Now that you know how to get a credit card for the first time, you can take a look at our comprehensive list to find the credit card perfect for you.
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