There are many factors to consider when applying for your first credit card, and deciding on a credit card can be daunting. There are a lot of credit card offers to consider, and even more to learn about how to use credit and credit cards responsibly. But it doesn’t have to be difficult. We’re here to help you make sense of the options and determine the best way to establish your credit and apply for your first credit card.
Before you’re ready to jump into applying for a traditional credit card, you may need to start smaller by establishing your credit for the first time. There are a number of options to help you establish and build a good credit score. Here are a few that can help you get started:
Your credit score will have a tremendous amount of impact on the type of credit card you can obtain, and a low credit score can keep you from qualifying for a card at all.
Individuals with low or beginning credit may be seen as a “credit risk” to some card issues because they do not have a proven track record of responsible card use for the creditor to look at.
Not all is lost, however, if you don’t have established credit, or if you’ve had credit struggles in the past. There are credit card options available at all credit levels. It’s possible to find a card that will work for your needs.
Credit cards are often thought of as a product when in truth they are more like a service. For some credit cards, especially for those who don’t have established credit, in order to pay for access to the service, you need to pay an annual fee. There are some cards that don’t charge an annual fee, while others charge as much as $95-$100.
For every credit card, regardless of annual fees, there are interest rates associated with your account that apply to credit card purchases and balance transfers. Interest rates can vary, and it is common for those who are just starting out with using credit to pay higher rates than those with established credit.
The interest rate your card carries determines how much it will cost to borrow money from the credit card issuer if you carry a balance. Most credit card companies will list their interest rates as an Annual Percentage Rate (APR).
In 2020, the average credit card offer carries a 19.02% APR, according to the Credit Card Landscape Report. Credit card offers for those establishing new credit can climb higher.
The short answer is, yes. Your credit card interest rates can change based on a number of scenarios. There are four typical causes that might trigger a change in your interest rate. Here are the typical instances when an APR might change:
Now that you have some insights into the process of applying for your first credit card, it’s best to take some time to compare the credit cards available for you. Many credit websites, such as WalletHub and Credit Karma, have credit card comparison tools. These sites allow you to search for credit cards based on the criteria that are most important to you.
When looking for a credit card, it’s important to focus more on the interest rates rather than on the rewards the credit card offers, and always read the terms and conditions so you know what you are agreeing to!
Above all, it’s important to educate yourself beforehand and practice good credit habits. Building good credit takes time and effort, but the investment is worth it. In no time, you’ll be well on your way to establishing a great credit score and a solid financial future.
The CESI Team is committed to helping you reach your financial goals. If debt keeps you from living the life you dream of, contact us for a free debt analysis today and get started on the road to a brighter future!
Consumer Education Services, Inc. empowers people to overcome their financial challenges and lead financially-healthy lives.
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