Most people know that a credit card is the easiest way to pay for things and maybe even earn rewards for your purchases. Plus they also help when you’re trying to establish a solid payment history or just improve your credit score.
If you’ve never had a credit card or are just starting and are looking into one, you might think that all cards are more or less equal, but that’s not true sometimes. Continue reading below to see how to choose your first credit card.
While you’re looking for a card, it’s important to look for one that matches your spending style. You might see that some people use their credit cards for occasional purchase while others might charge it to rack up big rewards.
So if you spend a lot of time traveling to work or to school, you might want to checkout a card that offers cashback or points for gas purchases. However, if you only plan to use the card once in a while to help your credit then rewards aren’t as important.
Compare Interest Rates
Every credit card’s annual percentage rate (APR) is different; so the higher the rate, the more interest you’ll pay. You have to have excellent credit to qualify for the lowest rates, which can be difficult if you’re trying to start or establish your credit history.
If you have bad or no credit, you will likely get a card with a higher-than-average APR, but don’t let it stop you from looking around. So try to get the best card you can get.
Some cards come with a fixed rate while others have a variable rate. Also know that some credit card companies also offer 0% interest to new customers during a set period of time. And once the promotional period ends, you’ll see your rate jump significantly.
Pay close attention to what APR is and how it is calculated. Beginner credit cards sometimes include features that make it easy to get hooked on credit, the best cards are ones that are straight forward.
Don’t Forget About Fees with Starter Credit Cards
Please do remember that credit card companies do charge different fees like annual fee, balance transfer fee, late fee payment, over limit fees, foreign transaction fees or cash advance fees. The more benefits the card offers or the higher your credit limit, the more you can expect to shell out in fees.
Note that many rewards cards charge an annual fees, so if you’re looking into this type of card you need to weigh the cost against any potential savings or benefits you’d get from using it.
Read Fine Print
When you’re applying for the credit card, make sure that you are reading the fine print before you sign a credit card agreement. Many card issuers will assess penalties against cardholders for various infractions and you want to know about these up front. So if you’re not paying attention, it’s easy to make a really bad mistake.
Credit Cards For No Cerdit
Due to the 2009 CARD Act, credit card companies have secured their restrictions on lending, meaning that getting a card isn’t always a sure thing. So if you’re turned down for a traditional credit card since you don’t have enough credit history, there is are a few ways for you can to improve your chances of getting approved.
First you can try a secure credit card. With this card, you give the issuer a cash deposit which will then serve as your credit line. It’s almost like a prepaid debit card, but the diffeernce is your activity is reported to the credit bureaus.
Another option is to find someone who’s willing to act as a co-signer or add you to their account as an authorized user. So if the primary cardholder has a solid credit history, it’ll help your score up by a few points. The only downside of this, is that if they end up missing a payment or run up their balance, it could have a negative impact on your credit profile.
How to Apply for a Credit Card
If you’re getting your first credit card, make sure to do a hard research to see which one fits your spending habits the most. Take the time to go to a bank and sit down with an employee who can talk you through your options.
If you’re a student, banks may come to your campus to promote credit cards for college. Make sure to compare these offers to other credit cards that are out there, just because they’re on campus doesn’t necessarily mean you’re getting the best deal. Note that students are sometimes vulnerable to high-interest credit card offers.
Once you have established a credit history by using a card for several months, you can apply for a card online, over the phone, or by mail. The best thing to do is to go inside a branch for your first card to make sure, you won’t know unless you ask.
Owning your very first credit card is an important step to your financial passage, but make sure you take the time to evaluate what cards are out there before you commit to make sure that you’re making the right choice.
If you need help on looking for you first credit card, make sure to check out the latest credit card bonuses and if you want to learn more about those cards you can read through our credit card reviews.