Getting a credit card can be financially liberating. It is an important financial step and can be a useful resource in the case of emergencies. Moreover, it gives you instant access to a loan. But if you have never had one before it may not be clear how you can get a credit card.
Applying for your first credit card is exciting, but knowing how to apply for one can be tricky as well. Therefore, it is important to educate yourself beforehand on how to get one and practice good credit habits from the beginning.
Moreover, as enthusiastic as you may be to get your first credit card, many companies or lenders are not so eager to give one. Instead of putting in several credit card applications to see who's going to approve you, target just a few companies that are known for giving credit cards to first-timers.
Furthermore, qualifying for a credit card can be tricky for first-time consumers. Not only has the pandemic changed the standards, but a young person with little to no credit may already have a tough time qualifying. Even so, applying for a credit card can be stress-free when you have all of the right information.
Therefore, in this article, we will explain in full details everything you need to know on how to get a credit card. Read on to learn more about how to get a credit card for the first time. However, before we move on to that, it’s worthwhile thinking about the reasons you might want one.
Pros and Cons of Using a Credit Card
Credit cards can be a useful tool to help you manage your money and there can be benefits to using credit cards for spending and borrowing in the short term. However, when it comes to getting your first credit card, keep in mind that while it gives you flexibility, it’s also a big responsibility. Therefore, it is important to know how to use one to avoid being stung by high charges.
As long as you only spend what you can ultimately afford to pay back, there are several benefits that it can bring. There are as follows:
- Spreading the cost of items over time
- Building a credit history or improving your credit score
- Earning rewards or perks such as cashback or air miles
- Purchase protection on items if the seller goes bankrupt
However, there are also several disadvantages to credit cards to keep in mind:
- It can be easier to spend more than you can afford
- Missed payments will damage your credit score
- Managing multiple credit cards can become difficult
- Utilizing too much available credit can concern lenders
How to Get a Credit Card
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. However, the guide and information below will be helpful if you’re thinking of getting your first credit card. Find out how to get a credit card and what to look for when choosing one.
Requirements to Get a Credit Card
Moreover, to qualify for any credit card, you will need to start with some basic information and documentation the issuer will review in considering your application.
- Social Security Number
- Proof of Identity (like a Driver’s License or birth certificate)
- Proof of income — and don’t forget to include all of your income streams
Then, follow these exact steps below:
1. Check your credit
Your credit history is a very important consideration when applying. Your credit history shows all the previous loans you have had and how well you have paid them back.
Moreover, your credit report and credit score are key metrics used by credit lenders to determine your creditworthiness. A credit report is a record of your financial history. It is a more detailed breakdown of your credit history and allows you to see how various events affect your score.
While your credit score is a numerical score based on that report. The more good loans you have had, the higher your credit score will be. Moreover, the better your credit score, the lower the interest rate you should expect to be charged. Your credit score is a single number that essentially summarizes your credit history. You can check your credit report for free once per year.
Furthermore, knowing your credit score and understanding what goes into it is a good first step toward applying for and using credit cards. The better your credit score, the more likely you are to get approved for new cards and the best interest rates.
2. Improve your credit
If you have a poor or little credit history, you might not be able to get a card right now, or you might not qualify for the best interest rate. However, don't worry there are ways to build credit scores. Here are some options to consider if you have a bad or no credit history:
- Try a student credit card
- Look for a retail credit card
- Get a co-signer or become an authorized user
3. Shop around and compare options to find the best offers
Credit cards can offer different types of rewards and benefits tailored to specific categories of spending. However, 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 multiple lenders.
Moreover, the list below shows a few features to look for that can help you choose a credit card:
- Low annual interest rate
- Generous repayment terms (e.g. zero interest for 3 months)
- Low or zero annual fees
- Cash-back program
- Reward program (e.g. reward points, airline miles)
- Other benefits (eg travel insurance).
4. Know what you are signing up for - 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.
Moreover, multiple applications within a short time frame can temporarily hurt your credit score, as well, so you should be selective about any card applications you submit. Therefore, take time to find a card that offers the best chance of approval and fits your needs before you apply.
However, here are some other things to keep an eye out for:
- Credit card payments: Credits cards have high-interest rates compared to other types of loans. Therefore, carrying debt from month to month will add extra interest costs.
- Missed payments: Moreover, failing to make a payment by the due date can sometimes mean additional penalties, it will also affect your credit score.
5. Apply for your first credit card
However, before you apply it is important to make sure you are ready to have a credit card. Keep in mind that a credit card is a loan and it must be paid back, sooner or later—and not an endless source of money.
Moreover, you can also consider cards from community banks or credit unions in your area. These cards often offer comparable rewards to major issuer cards but may be easier to qualify for, especially if you already have an account history with the bank.
To sum up, you apply, compare all the card offers you find, factoring details such as your spending habits, the likelihood of approval, access to branch locations, and long-term card use into your decision.
Then, once you’ve chosen your card, online-only or otherwise, you can usually apply entirely online. Have all of your information readily available, like your social security number. Make sure you include all sources of income on your application to improve your debt-to-income ratio, a factor that can impact your creditworthiness.
Things to consider when applying for your first credit card
Furthermore, there are some important considerations to keep in mind when applying, some of these include:
- 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.
- Age. You must be older than 18 to apply. Otherwise, you can only be an authorized user of someone else’s card.
In conclusion, once you have a credit card, responsible usage to begin building your positive credit history is key. The most important thing you can do for your credit is to make payments on time.
The process of applying to get a credit for the first time is very different from a debit card. It gives you instant access to a high-interest loan. Note: it is important to compare offers from different lenders and pick the one that gives you the most advantages.