How to get a credit card for the first time?
As enthusiastic as you might be to get your first credit card, most credit card companies are not so eager to offer you one. Instead of putting in several credit card applications to see who is going to approve you, target just several companies that are known for providing credit cards to first-timers. Typically credit card applications are easy, but you will require to meet some minimum financial requirements to get acceptance for the best credit card offers. If you are an adult with a good track record of on-time payments to car loans and student loans and a steady job, you should not have an issue getting a credit card. Learn the process of applying for a credit card online and what to anticipate on a credit card application.
Ensure you are ready for your first credit
Being of age to qualify for a credit card does not mean you are prepared to get one. You must be responsible enough to charge only what you can afford and to pay your bill monthly without being reminded. Getting a first credit card before being fully prepared can be a disaster for your credit. After your credit is damaged, it can be hard to get it back on track. Do not set yourself up for failure; learn all you can about credit cards before getting one. In case you are not ready, there are steps that you can take to get there.
Be at least twenty-one years old or eighteen with either parent’s permission or with a valid source of income
The CARD Act of 2019 is adopted to avert banks from specific dangerous practices, such as marketing credit items to young adults without the income to repay their obligations. In case you are under twenty-one, you can still get a credit card, but you might need to offer documentation that proves you have your own source of income- or a parent’s permission.
Have a social security number
Typically, you will require a Social Security number to develop a credit report. Non-citizens who lack a Social Security number will not possibly be able to get approved for a credit card.
Make sure you have a source of income
Credit card applications always ask for your estimated monthly income. Banks will not lend money if you do not have a way to repay the debt. You don’t have to report all of your income, just the income you want to be considered as accessible to repay your credit card. This does not mean the bank could not one day come after all of your income in case you fail to pay. However, it might be the responsible thing to do not to include income earmarked for other things (for instance, child support) on a credit card application.
Your reported income is one of the many elements a bank will utilize to decide if they can approve your application and how much of a credit limit to extend. In most situations, income reporting is on an honor system, but the bank could ask for proof of income (like W-2 or a pay stub) in specific circumstances. In case you are a full-time college student, you might qualify for a student credit card even though you only earn a little bit of money from part-time work.
Have a positive credit history
Unsecured credit cards need applications to have developed credit histories. Most cards need good credit scores of 700 or more, even though some cards designed for fair credit, such as Capital One® Platinum Credit Card might accept applicants with lesser scores. Some of the best offers might need a minimum of seven years’ good credit history; however, you can typically get a sense of the kind of credit score needed before you apply to a specific credit card.
Typically, credit cards with more lenient application requirements will have interest rates and higher fees. You will want to proceed carefully, but such cards can still be an excellent way to keep on building your credit history. In case you do not have a credit history or have abysmal credit, you will need to look into a secured credit card. A secured credit card needs you to make a deposit of often two hundred and one thousand dollars into a bank account before you can open the account.
Know where to get your first credit card
In case you are enrolled in college, you have a high chance of getting accepted for a student credit card from any major credit card provider. Nonetheless, some student credit cards have high-interest rates and annual charges, both bad options for a first credit card.
In case you have been responsible for a checking or savings account., try applying for your first credit card at your bank. An existing banking relationship can enhance your chances of getting a credit card application approved, particularly in case you have handled your account responsibly. You can visit a branch or apply online, but visiting a bank can put you face to face with a representative who might have more authority to get your application approved.
Department and retail stores typically have more approval odds. On the downside, they have high-interest rates that make it costly to carry a balance from one month to the next. Another disadvantage of these cards is they are not versatile- you can use them only in that store. Nonetheless, retailers frequently encourage spending by providing discounts for utilizing the card and having a retail store credit card as your initial credit card can assist you in creating a good enough credit history to apply for a basic credit card within a few months.
When your lack of credit history hinders you from getting a standard credit card, you can apply for a secured credit card. You can create a deposit against the credit limit of the bank account. The bank will hold the deposit just in case you do not make your payments as agreed. You might have the chance to convert it to an unsecured card later on. Ensure the card issuer reports payments to the credit reporting agencies so you can build credit and eventually get an unsecured credit card.
Applying for the credit card
After you find a card you like, you will complete a basic credit card application. A credit card application typically asks you for:
- Housing situation
- Gross annual income
- Date of birth, your name, and social security number
(Renter, homeowner, or living with others) and your monthly housing payment. This data, together with your income, is used to determine how much disposable income you may have and, consequently, your credit limit.
Time at present residence
Credit applications inquire how long you have lived at your present address for two reasons. First, your address assists verify it is you, not an identity thief, applying. What if your application does not match your credit report? You will not automatically be declined, but the bank will take a closer look. Then the bank might consider how long you have lived in one place as a threat signal. Statistically, people who have lived in one place are more likely to have stable occupations and pay their debts. Moving around may indicate trouble holding work. It is not to say living at your address for less than two years indicates you will be declined- it is just one of the many factors.
Date and your signature
A credit card request is a legal document. In case the bank ever attempts to gather a debt from you in court, they will require to offer evidence that proves you created this account. An online signature can act as evidence too. Optional fields on credit card application include:
- Authorized users: You might be able to include authorized users to your account, in which case the bank will ask for their names. These users will get a card in their name and be able to make purchases with the card.
- Balance to transfer: In case the card allows balance transfers, you might request to have balances moved from other credit card accounts to the novel card.
To appeal for a credit card in the United States, you will need a valid Social Security number and a positive credit history. The best credit cards might require at least three to five years of good credit history, and some more than seven. In case your credit file is not good enough, do not be discouraged if you are turned down for a credit card. You might require to apply for a different kind of credit card or jump start your credit by using a secured card.