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Getting Your First Credit Card

Kristie Lorette McCauley
Shopping with a credit card

Receiving your first credit card is an opportunity to begin building credit. The value of credit today is high. Not only is it necessary to have good credit to obtain a loan or credit card with a good interest rate, but it can also be useful when you're obtaining insurance or applying for a job.

Offers for Credit

Individuals who are 18 or older can expect to begin receiving credit card offers. Laws put in place in 2009 make it essential for parents to cosign loans for those under 21 unless they have proof of income. The Credit Card Act of 2009 put laws in place to protect consumers from fine print and "gotcha" type advertising by credit card companies, which is why it limits credit opportunities for individuals under 21 without a co-signer.

From the very start, it is critical to ensure that the individual has the best credit card possible. Once a line of credit is open, the lender begins reporting the payment history to the credit bureaus.

Start Slowly

Before applying for credit card offers, ensure that you only apply for one credit card at a time. Credit scores may reduce for individuals who have multiple inquiries on their credit report. They usually give you some leeway if it appears that the multiple inquires appear to signal that you might be shopping around for credit; however, you should keep credit shopping to a minimum.

Starting With Secured Credit Cards

Those who do not have a credit history may benefit from a secured credit card. These types of cards require that you deposit funds which, in turn, become your credit limit or a portion of your credit limit. Your first stop should be with your existing bank, but you can also shop around to see what other banks are offering before selecting the right offer.

Look for a lender that offers this type of card with low fees and who reports the payment history to the credit bureaus each month. Over time, showing a good payment history on a secured credit card will help you improve your credit.

Applying for a Credit Card

If you are not receiving suitable credit card offers in the mail, contact the financial institution where you have your existing checking or savings account. Most financial institutions offer a credit card (or more than one credit card option). Since you have an existing relationship with the bank, it can make the application process a bit easier.

You can also look at individual bank sites online. Most banking sites have a credit card link or option. The site tends to list each credit card the bank offers, along with the terms and conditions of the card. When you find the best card for your personal situation, you can apply online or contact the bank offering the card to complete the application process by phone.

Whether you receive the offer in the mail or venture out on your own to find credit card options, compare several lenders' offers before making a decision on just one of them.

Comparison Shopping

Credit cards have a several different terms and conditions that you want to consider before deciding which card is right for you.

  • Annual fee: Some cards charge an annual fee to have and use the card. Some cards do not have an annual fee. For your first credit card, find a card that does not charge an annual fee.
  • APR/Interest rate: The interest rate is the rate that you're going to pay on any balances that you do not pay off each month. When you are building credit, it is best to only charge what you can afford to pay off each month so you aren't paying any interest at all. On the other hand, when and if you do have to pay interest, paying the least amount of interest possible is the way to go.
  • Cash advance fees: Some credit cards have a cash advance feature, so your credit card comes with a PIN and works similar to an ATM card. Look at and compare the fees and the APR the bank charges for cash advance fees, but keep in mind that cash advances typically come with a hefty interest rate and possible additional fees.
  • Late payment fee: Your goal is to always make your payment on time. In the event that you don't, the credit card company can hit you with a late fee. Understand what the fee is upfront and strive to balance the best interest rate with the lowest fees overall.
  • Introductory rate: Read the fine print. It can be true that you pay 0% interest, but it is usually for a set period, such as six months. After this, the interest rate converts to the normal APR, so be sure you know that rate is. While it can be beneficial to have a low- or zero-percent interest rate upfront, comparing the APR at the back-end is even more important.

Take all of these facts and figures to compare the offers you have for the cards you plan to apply. Find the card that offers you the lowest fees possible and start by applying for it.

Good First Credit Card Options

For those who are looking for a first credit card, the process requires a reasonable amount of comparison shopping.

Building credit is a slow process. You can start out by applying for and using a gas credit card or a department store credit card before launching into a standard Visa, MasterCard, or other major credit card. Responsible use of a gas or department store credit card can help you establish and build your credit, which improves approval chances when it is time to apply for a major credit card. Pick up an application at your local gas station or department store.

Card Suggestions

Major credit card options are available for individuals looking to establish and build credit. Some of the major banks offer specific options including:

  • Citi offers several credit cards for those with no credit or limited credit history. The bank also offers a credit card specifically for college students who are looking to establish credit. The company has an easy-to-use selection process on its website to help borrowers find available offers for everyone, student or not.
  • One of the largest companies to offer low interest, rewards programs and starter credit cards is Capital One. Its Platinum card is ideal for first timers because it provides the card you need to build credit with no annual fee for the first year and a low annual fee of $19 after that. It also has a comparable interest rate to Capital One's other credit cards for those looking to build credit.
  • USBank offers a secured Visa credit card for new borrowers. In addition, it affords the borrower numerous protections to help with credit management.

Approval Process

Once you submit the application for the credit card, the bank starts processing your application. One of the first things they are going to do is run a credit check. They are looking to see what type of existing credit accounts you have and what your behaviors are with these accounts. Student loan payments, car payments, mortgage payments and any installment loans you may have are going to show up on your credit.

  • The credit card company is looking to see what the balances are on each account.
  • They are also checking to see if you make your payments and if you make your payments on time.
  • They want to see that you are responsible enough so that you aren't making late payments, but they also want to see if you are overextended.

In other words, they are checking to see what your outstanding balances are on your other accounts to ensure that having a credit line with them doesn't put you in a situation where you can't afford to make at least the minimum payment due each month.


If you don't have enough credit or if you have poor or bad credit, then the credit card company might allow for a co-signer. If they do not offer this option to you, ask if it is a possibility.

A co-signer is typically a parent, but can be another relative or close friend with good credit. The co-signer is equally responsible for the credit card, so you are piggybacking off their good credit to receive approval on the credit card. If you do not make payments, or if you make late payments, the co-signer is responsible for the payments and it can cause them credit problems on their own credit reports.

Make the Right Decision

A first credit card opportunity is one to take seriously. Be sure to invest time in the process of finding the right fit for any credit card you are considering.

Getting Your First Credit Card