19 Mar How to Get Your First Credit Card
Credit cards, when used correctly, are one of the easiest ways to build credit. Many credit cards also offer cashback on everyday purchases, such as groceries and gas, that may help you save a bit of money. There also many bonuses that come with some credit cards such as airline miles. Yet getting your first credit card can be difficult, especially when you have little to no credit. Here are some tips for getting your first credit card.
Before you apply
Ask yourself some questions before you start looking for a credit card. Are you ready for the responsibility of a credit card? Will you be able to make monthly on-time payments? What do you want from your credit card? Rewards? A chance to build credit? These questions can help you in your search, and whether a credit card is good for you right now.
Get a secured credit card or a co-signer
A secured credit card is a credit card that requires you to put down the amount of your credit limit as a security against you, much like a secured loan. People with little to no credit often turn to these cards because they are backed by your deposit so you are more likely to be approved. Or you can get a co-signer who has a history of good credit history to sign off on a credit card for you. Yet be aware that getting a co-signer requires a lot of trust, if you default your debt goes to them, so you have to be responsible with your spending.
Consider getting a student card
If you are a college student, your best bet for getting approved would be a credit card specifically for students. These cards are made tailored towards college students with little to no credit and offer the best way to build credit for more rewarding credit cards. Some student credit cards offer some rewards. But they often have a low line of credit which might be a huge con if you are looking for a credit card with a higher limit.
Try a store credit card
If you are denied a credit card for both a secured and a student credit card, consider getting a store credit card. Store credit cards are well known for approving people who have little to no credit. Yet be aware that some store credit cards have very high-interest rates and that you can only use the card in store.
While it may be tempting to let your spending go wild, paying at least the minimum each month is crucial. Part of the benefits of having a credit card is increasing your credit history, and letting payments go by each month without paying can be very detrimental to your credit health. Remember, your first credit card is not your last credit card. As your credit history increases, and your score, you can apply for other credit cards that have better rewards or interest rates.
Your first credit card is a huge milestone for anyone. At the Bank of the Lowcountry, we want to help you make the best decisions for your financial needs. If you have any questions about getting your first credit card, contact us today so that we can help you.