Your first credit card could be the gateway to building your credit and opening up your financial options.
You may have decided to apply for your first credit card for a variety of reasons. Many people realise that it is difficult to live without one as they are needed for simple transactions like reserving a hotel room or making a long-term purchase. Maybe you have decided that you simply need to establish a credit history and know that one of the easy ways to do that is by having a credit card.
With the help of credit cards, you will be able to have a credit history which will serve as the basis for the approval for your application of personal loans or home loans. However, you have to keep in mind that you need to use your credit card wisely so that you will be able to keep a good credit history.
Tips for applying for your first credit card
When applying for credit cards, keep in mind that there will be a lot of considerations to make. Ask yourself if you will be using your credit card to make everyday purchases. You should also consider your payment habits, if you are making timely payments or not. In addition, you should also consider whether you will need a credit card with a rewards program or not.
Once you have answered these questions and you have evaluated your needs then you can apply for your first credit card. Just keep in mind that credit cards are a great responsibility. There are also other factors to consider which include the following:
- The stability of your job.
Banks and financial institutions would screen your qualifications before granting you a credit card and these would include your job's stability as well as your salary.
- Your credit history.
In case you have a previous credit history, banks will also check on your standing.
- Personal and financial information
Banks and financial institutions will also require you to submit numerous documents for your application so you have to be prepared.
Unfortunately for people with no credit history this can be somewhat challenging as many banks will not want to take a chance on a credit newcomer.
If for example you ever wanted to be able to apply for a personal loan or a home loan, you can do so much easier by applying for a credit card as your initial step.
What are my options for your first credit card?
- I'm a student.
If you are a student many credit card companies offer a first credit card. Check out some student credit card options. This card will probably have a low limit to help ensure that you do not overspend. See some low credit limit credit cards.
- I don't want to change banks.
Your current bank may have a credit card they offer to their patrons. It may require that you keep at least one open account as long as you have the credit card.
- I regularly shop at stores.
Department stores and supermarket chains also offer credit cards. Be sure to compare these careful, as they could have high interest rates. Compare a range of store cards before applying.
You can choose from various types of credit cards and take advantage of offered features.
These are the main types of credit card features that you'll need to consider with a first credit card application:
Do keep in mind that these features would differ from one financial institution to another. Make sure that you compare each feature first before you make up your mind for the appropriate credit card right for you.
Just in case you are declined with your first credit card application, do not lose hope because you can still apply for it again. You just have to wait for the right time and make sure that your credentials meet the bank's requirements.
Start your comparisons
Use the table below to compare rates, fees and rewards. Use the check boxes to shortlist cards and then compare the information side by side.
Maintaining your credit standing with your first credit card:
Most peoples first credit card often establishes your credit history. It is important that you do this on a positive note, don't overspend and make sure you pay all of your bills on time.
- You might have this credit card for a long time. Having a line of credit for a long period is good for your credit history so you will want to make sure that this relationship remains strong by keeping your balance low and your payments regular.
- Often, because newcomers are a risk, banks will give them higher interest rates. You should be aware of this and the long-term cost of carrying a balance. Once you have established a good credit history you should see if you are eligible for a reduction in your interest rate or if another card with lower interest is suitable.
When it comes to personal finance there are few things more important then the establishment of your first credit card. Being responsible with it is the key to your future credit rating.