Everything You Need To Know Before Getting Your First Credit Card
Anyone who has a credit card went through the process for the first time. It can be intimidating and maybe a bit thrilling to be granted this level of authority over your financial destiny. If you follow this information first, you’ll be ready to take the next step.
Why People Apply for a Credit Card
Trying to imagine modern life without a credit card is difficult. You can’t buy online without one in most cases. Most people like the ease it affords them. Using credit cards to make purchases allows you to streamline your cash flow and get what you need, when you need it. You don’t even have to keep a balance on the card. If you get the right kind of card, it can allow you to leverage your everyday purchases to earn significant rewards, including points, miles or cash back.
Considering Credit Card Offers
There are hundreds of credit cards out there, so you have to look for the one that’s right for you. Credit cards offer a list of terms, which usually include:
- Special rates or promotions when you open the account
- Fees for using the card, balance transfers or late payments
- The interest rate you’ll have to pay on debt you carry
- How long you have to pay before it tacks on interest
- What happens if you miss a payment
- Details on rewards programs
When you are first building credit, your options might not be as great as someone with excellent credit. Your goal should be to look for cards that have lower fees and interest rates, and better perks for spending.
How to Get a Credit Card for the First Time
Once you have selected a card and fill out an application, you might get a response fairly quickly. Some online forms are designed to look at your information and approve or deny within a few minutes. Be sure to use a trustworthy site, since you’re providing access to confidential records.
Most credit card companies look for similar information, such as:
- Social Security number
- Date of birth
- Physical address and phone number
- Monthly or yearly income
They need this information so they can check your existing credit and income to decide if you are a good candidate for the card. They’ll send the bills to the address, so it’s important to make sure it is accurate.
Opening Your First Credit Card Account
After you are approved for a card, find out information about your credit limit. If you have no or little credit, the company may offer a small limit to start. Before you can use the card, you might have to wait until it arrives in the mail. You may want to create an online account with the credit card company, so that you can be ready to activate the card and make payments. When the card shows up, activate it promptly and sign the back. Some companies allow you to activate it online, while others may ask you to call.
Using a Credit Card Wisely
Careful use of a credit card can help you build better credit. Keep in mind that applying for too many cards or running up a lot of debt can negatively affect your credit. It’s tempting to splurge, but you may regret doing that. Be sure to set your spending below what you can afford to pay back. Once you’ve made the purchase, you’re on the hook to pay it back. Create a reminder to pay the bill every month so you don’t forget.
Opening your first credit card account could be a step into a better financial future for you. If you go into it with your eyes open and all the information you need, you’ll make a better decision. When you are ready to take the plunge, apply for a credit card today.
Editorial Disclaimer: Information in these articles is brought to you by CreditSoup. Banks, issuers, and credit card companies mentioned in the articles do not endorse or guarantee, and are not responsible for, the contents of the articles. The information is accurate to the best of our knowledge when posted; however, all credit card information is presented without warranty. Please check the issuer’s website for the most current information.