In this post, we will explore how to acquire a credit card for the first time. According to the Federal Reserve Bank, 75 percent of all American adults have at least one credit card.
Americans use credit cards as a safe and easy way of payment, but they also like the privileges and monetary incentives that come with them.
If you’re not sure how to acquire a credit card for the first time, we’re here to assist. It’s a lot easier to do it yourself.
Here’s everything you need to know if you’re applying for your first credit card, as well as how to apply.
Obtaining a Credit Card Despite Having No Credit History
Unless you’ve been piggybacking as an approved cardholder or used a credit builder loan, you’re unlikely to have much credit history or a credit report with a major credit agency when you reach the age of 18.
When you don’t have any credit, it might be difficult to pass a credit check. However, there are two types of credit cards that you can apply for if you have no credit history:
Starter cards are intended for persons with little or no credit history and often come with a small line of credit of $100 or less.
Many people’s first credit card, for example, is a shop charge card that can only be used for in-store transactions.
While you may only acquire a limited line of credit, it is sufficient to begin developing credit right away.
Some banks also provide cards to first-time applicants, and various student credit card alternatives are available to full-time college students with little or no credit history.
The second form of credit card is secured credit card, which is offered to applicants with no credit history as well as those with terrible or weak credit.
A secured credit card differs from an unsecured credit card, which is what most people envision when they think of a credit card. They also operate in a different manner than prepaid cards.
Secured credit cards typically demand a minimum refundable security deposit of $200, and the amount of your deposit becomes your credit limit.
If you prefer not to make a deposit, a beginning credit card may be the best alternative.
Before we go into how to acquire a credit card for the first time, let’s go over what you need know when selecting a credit card to ensure you get the proper one.
Once you’ve determined that you have decent credit and are eligible for a credit card, the next step is to choose the best one for your requirements.
With hundreds of banks and credit unions in the United States providing credit cards, it might be difficult to select the proper one.
However, after you have done so, you should be able to start accumulating credit and taking advantage of cash incentives.
Here are a few suggestions to make things simpler for you:
1. Begin with your present bank.
Applying for a card with your bank or credit union is an excellent place to start if you already have a checking or savings account.
Your personal information will already be on file with this institution as a result of your bank account.
And because it has already done business with you, it may be more likely to approve you for a new credit card account.
2. Select either a starter or a secured card.
The following choice is to select between a starting card or a secured card. Just be sure to read the terms and conditions of the card before applying so you can discover the best match for you with a credit limit that meets your demands.
3. Before applying, read the card’s terms and restrictions.
Never sign up for a credit card without first reviewing the card’s terms and conditions. Credit card companies are now forced to display the most essential rates and fees in an easy-to-read table, rather than hiding it in the fine print.
4. Look for a card with the fewest costs.
You should also look for a card with the fewest costs available. Some credit cards have an annual fee, while many do not.
Some people prefer to pay an annual fee for a premium card with a more generous reward points program, but these cards are rarely available to persons with little or no credit history.
Late fees, balance transfer fees, and international transaction costs are further factors to consider. Finally, before you apply for anything, be sure you understand precisely what you’re getting yourself into.
Best Credit Card for You
While there is no one greatest first-time credit card for everyone, here are a few cards with the finest deals for first-time applicants:
Capital One Journey Student Rewards: This card is available to full-time college students and provides excellent rewards on all qualified purchases.
This rewards card gives you 1% cash back on all purchases and 1.25 % if you make your payments on time. There are no yearly fees or international transaction fees.
• Capital One Secured Mastercard: This card needs a $49 minimum security deposit but provides a $200 credit line.
It also necessitates access to a larger line of credit after making your first five on-time monthly payments. There are no yearly or foreign transaction fees.
• Discover Student Chrome: With this card, you may receive 2% cash back at petrol stations and restaurants on up to $1,000 in combined expenditures each quarter, as well as unlimited 1% cash back on all other transactions.
It also provides you with a $20 statement credit for each school year in which your GPA is 3.0 or better, for a total of five years.
It has no annual charge and no international transaction fees, and Discover will forgive your first late payment cost automatically.
How to Apply for a Credit Card for the First Time
Now that you know how to get the best credit card for yourself, let’s talk about how to acquire a credit card for the first time, how to apply, and how to get the most out of it.
If you want to apply for a card with a bank or credit union where you already have an account, you may find it easier to do so by contacting or visiting a branch.
Alternatively, you may apply online by logging into your account. However, the great majority of credit card applications are conducted through the website of a bank or credit union.
When you apply, you must include your name, address, phone number, email address, and Social Security number.
The application may also inquire about your current job situation. If you don’t have a job, you can still be accepted, but you’ll have to produce proof of another source of income.
Just keep in mind to mention any types of income that are eligible, such as:
• Student debt
• Government perks
• Child maintenance
• Your spouse’s income (if you intend to use it to pay expenses)
You may also be asked if you have a checking or savings account, as well as how much you pay in rent or mortgage each month.
After you’ve filed your credit card application, the card issuer will run a credit check on you.
This credit application will generate a file with at least one of the three main credit agencies, Equifax, Experian, and TransUnion, if you have no credit history.
One of two things will happen next. You may be given an instant approval notification, or you may be told that you will be notified by letter.
If you do not obtain quick approval, your credit card provider may still authorize you by letter.
What Should You Do If Your Application Is Rejected?
Keep in mind that if your application is refused by mail, it may not be the bank’s final decision. Contact the card company to discuss your application and persuade them to reconsider.
You may just have typos on your application, or you may need to include additional eligible sources of income that you may have overlooked.
Don’t give up if you aren’t accepted. The credit card market is fiercely competitive, and many banks and credit unions are eager to establish new client ties.
If you were turned down for a beginning card by a credit card issuer, consider applying for a secured card.
Secured cards normally approve virtually all applicants who are not insolvent, can establish their identification, and can pay the requisite deposit.
Self just announced the Self Visa Credit Card, a secured card that allows you to secure the card’s limit by using portion of your Credit Builder Account savings progress. This is a good place to start.
How to Make the Most of Your First Credit Card
Now that you know how to acquire your first credit card, let’s talk about how to utilize it to guarantee proper credit build-up and that you get the most out of it.
When you are authorized for a new credit card, you must usually wait for it to arrive in the mail before you can use it.
However, certain credit card companies, such as American Express, provide new account holders with their credit card details online, allowing you to use them right away.
Here’s what you need to do when you receive your card in the mail:
• Make your credit card active.
You must first activate it before you can use it. To activate your card, contact the number listed or go online.
Set up online access to assist you in managing your new account. You will be able to view recent transactions and payments as well as access statements if you have online access.
Allow you to use any card features and perks, such as rewards bonus points on qualified transactions.
You can also get your card issuer’s mobile app, which has a lot of the same features.
Use the alerts provided by your credit card company. Almost all credit card companies provide email or SMS alerts for major occurrences.
You may, for example, set up your account to warn you of new bills, payment due dates, or even major transactions.
• Make use of credit score access
Many credit cards now provide free access to your credit score online. Take advantage of it if they do.
Your credit score contains useful information that you may utilize when you develop credit with the credit bureaus.
It’s a good idea to check your credit score on a frequent basis so you can quickly identify any issues and learn how to develop credit rapidly. Also, make sure you understand how to view your credit report.
• Make purchases using your card.
After you’ve activated your card and established your online credit account, it’s time to start making purchases with it.
Use your credit card as you would any other form of payment. This entails treating all of your purchases as though they were made with cash. Know how much money you’re spending and where it’s going.