Credit cards are about convenience, especially when you want to rent a hotel room or car, or buy anything online. They are also an important credit-building tool. But getting your first credit card can be a challenge since you’ll need to show proof of income and have a good credit score.
Building a credit history takes time, which is why getting your first credit card may be a bit difficult. You need a credit history to get credit since lenders want to see that you can responsibly manage your money and pay bills on time. When you apply for a credit card, lenders review your credit score and income to determine your credit limit and the interest rate for the credit card.
Here are tips to help you through the process:
There are cards designed for people with little-to-no credit history that have more favorable terms for someone just starting out. These credit cards generally require a deposit or that you open a bank account, and your credit limit is up to that amount. As you build your credit history by making on-time payments, your credit limit may increase without an additional deposit. Also, some have no annual fee and more lenient payment terms, such as no late fee on the first late payment or no interest rate increase for any late payments.
Review the different rewards programs, and choose one that best fits your lifestyle. These can help alleviate some of your expenses in your budget if you plan ahead. If you travel a lot, then a card with travel perks might work well for you, for example. If you want to use your rewards to buy big-ticket items, then one with a generous points program might be better. If neither of these suit your budget, then perhaps a card with cash back for everyday purchases will give you the most benefit.
If you’re unable to qualify for a credit card on your own, then consider a co-signer, like your parent or guardian, or applying for a secured card.