Important Things to Know Before Getting your first Credit Card
Achieving the first credit card is a milestone and an adjustment. You might have an idea regarding the functioning of credit cards and how to be responsible while using them. However, it’s the unknown details that can cause trouble for you. By learning all the nitty-gritty details, you can save money and gain a high credit score. This blog shares some of the most basic rules for beginners.
Don’t buy high-end cards the first time
A newcomer can’t be eligible for upscale credit cards which boast lucrative rewards and long interest-free periods. This is because these cards are up for grabs only for people displaying high credit scores and long credit history. So, go for a small card. It can also offer nice rewards.
Security deposit offers ease
Approval is difficult for the first card as there’s no credit. Try a secured credit card that requires a cash deposit while opening the account. The credit limit will be usually equal to the deposit which ranges from $200 to $500. Secured cards offer the freedom to deposit more to have a high limit.
The first card can determine your credit
The purpose of the first credit card is to boost your credit. But it can have the opposite effect if you’re not careful. While using the first card, make sure to always pay full on time and don’t overspend the limit. These mistakes can ruin your score. Ideally, your purchases should be 30% below the card limit.
Check the rates and fees
Issuers disclose fees and rates on the application before you get your card. This includes the late fees, annual fee, foreign transaction fee, and APR. Make sure to know all these details to check if they’re suitable for you. As for the credit limit, it’s usually disclosed after you are issued the card.