Credit Cards

4 tips for getting your first credit card

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Making the right decisions about your card can help improve your finances in the long run.

Key points

  • Credit cards can help you earn rewards and build credit.
  • Getting your first card can be tricky.
  • A co-signer may be able to help you get a card, and secured cards are also an option.

Credit cards can be a great tool to help you build credit by giving you the opportunity to show that you can pay your bills on time. If you get a rewards credit card, you can also benefit from all the spending you do by earning miles or points that you can use for travel or merchandise or get cash back.

While there are many good reasons to open a credit card, it can be tricky to get your first card, especially if you don’t have much credit, as card companies will check your credit score. Here are four tips to help make sure you can open a card and get the right one for your needs.

1. Consider a cosigner

Sometimes credit card companies will be reluctant to give you your first credit card because they have no way of knowing if you’ll pay responsibly. If you want the widest variety of card options for your first credit card, it’s worth considering getting someone to co-sign.

A cosigner agrees to share the legal responsibility for making payments, so card issuers won’t have to worry as much about your default. If you can get someone with good credit to be your co-signer, you should be able to get approved for almost any credit card because the card issuer will have a fallback option if you don’t pay as promised.

Just make sure you pay your bills if you go this route, otherwise your co-signer could be in hot water and your late payments or non-payment could damage your good credit.

2. Look into secured cards

If you can’t or don’t want to get a cosigner, a secured card might be the perfect choice for your first credit card. Secured cards require you to make a deposit equal to your line of credit. So, for example, you would have to deposit $500 to get a credit card with a $500 line of credit.

Card issuers will allow almost anyone to get a secured card as there is no risk to them that they could garnish your deposit if you do not meet your payment obligations. But you can build credit with one, since your payments will be reported to the credit bureaus.

Over time, many secured cards can become unsecured, so this is a good way to get a foot in the door and start being able to borrow.

3. Beware of fees

Chances are you don’t want a card with high fees for your first credit card. Sometimes it’s smart to pay an annual fee if doing so gives you access to a generous rewards program or great perks for cardholders. But when you’re just starting to build credit and get your finances in order, you may not spend enough on your card to justify paying an annual fee for it.

4. Research rewards programs

Finally, you’ll want to research the rewards programs that the different cards offer. If you can find and get approved for a card that offers extra rewards for the things you spend the most on, you can lower the actual cost of all your purchases.

By considering these four tips, you should hopefully find a great card. Just remember, credit cards have high interest rates, so you’ll want to use them responsibly, avoid carrying a balance, and always pay your card on time, no matter which card you end up signing up for.

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