Are you ready to open your first credit card, but don’t know where to start? This guide is designed to answer all of your burning “my first credit card” questions. It will also walk you step by step through the process of opening the best first credit card for you and show you how to manage your new account—like a PRO.
How to Get Your First Credit Card with No Credit History
Before you start filling out random credit card applications or even picking out your favorite credit card features, it’s important to take a breath and set the right expectations.
Think of it this way: you need to understand how a lender might feel about approving you for your first credit card account.
Lenders count on credit reports and scores to help them predict the risk of doing business with you.
So, step one in this process is to check your three credit reports from Equifax, TransUnion, and Experian to see where you stand.
Tip: You can claim a free copy of your three credit reports once every 12 months from AnnualCreditReport.com.
The search for your first credit card should be based on the type of account you’ll likely qualify to open.
You can make an educated guess about this account based on the information you find on your credit reports and your credit scores.
Option 1: Some Credit Established
Qualifying for your first credit card may be a little easier in this situation because a lender can predict your credit risk more easily.
You might consider:
- Student Credit Cards
- Unsecured Starter Credit Cards
- Credit Cards for Consumers with Average to Good Credit Scores
Option 2: Credit Newbie
Now, let’s say you check your credit reports and they’re truly blank slates. It’s hard for lenders to know whether you’re likely to repay the money you borrow as agreed. You don’t have a credit score or a track record with others for the lender to review.
If this describes you, qualifying for a first credit card can be a little trickier. You’re basically asking the card issuer to be your credit guinea pig.
You might consider:
- Secured Credit Cards
- Credit Cards for Consumers with Limited Credit History
- Authorized User Status (on a Loved One’s Credit Card)
Features to Look for When Choosing a Credit Card
Once you know the type of card offer you’re likely to qualify for, the next step is to start comparing account features within the same category.
Because there are numerous options and benefits, the best first credit card for you might not be the best card for the next guy.
Not sure where to start? Here are some features you can compare when you’re shopping for the perfect-for-you first credit card.
To keep things simple with your first card, you might want to search for a card with no annual fee. But an annual fee isn’t necessarily a deal-killer once you get the hang of things. Some rewards cards offer benefits that far outweigh their annual fees.
Rewards or Cash Back
Some starter credit cards offer modest rewards or cash-back benefits to cardholders. If you feel confident that you won’t spend extra money chasing rewards, these benefits can help you enjoy some extra value for your purchases.
Your credit card APR isn’t that important if you pay your full balance each month. In fact, you can avoid paying interest on most cards by paying your balance within the grace period.
However, if you think you’ll revolve a balance on your card sometimes, a lower APR could save you money.
How to Apply for a Credit Card
Now you’re ready to apply for a credit card. The actual process is pretty simple. Some card issuers will let you check to see if you’re pre-qualified for cards on their website before you submit a full, official application.
This usually requires a soft credit inquiry that won’t hurt your credit score.
Tip: Being pre-qualified isn’t a guarantee of approval, but it does mean you have a good chance.
Next, you’ll fill out a full online application and a hard inquiry of your credit will take place. This is the step where you’ll find out whether the card issuer will approve or deny your request for a new account.
Here’s a list of some of the information you might need to provide when you apply for your first credit card:
- Personal Information (Name, Address, Social Security Number, Date of Birth, Etc.)
- Annual Income (Full-Time Wages, Part-Time Wages, Alimony, Child Support, Etc.)
What happens next?
You may be told immediately whether your credit card application is approved or denied. Other times, you may receive a message that your application is being reviewed and you’ll receive an answer in the mail.
If this happens or even if you receive an outright denial, you can call the card issuer and ask it to reconsider.
The answer might still be “no,” but sometimes you can provide more information that might turn a denial into an approval.
Prepare For More Offers
Once you open a credit card, establish some credit, and qualify for a credit score (if you didn’t have one already), other lenders may take notice.
If this happens, you might start to receive other credit card offers in the mail.
Be careful not to get carried away when and if new credit card offers start to flood your mailbox.
Sure, it’s nice to feel wanted, but there’s a catch. If you open too many new accounts in a short period of time, the new hard inquiries might be bad for your credit scores.
Healthy Credit Habits
The process doesn’t end after receiving and using your first credit card!
Credit cards can be a powerful tool to help you build better credit for the future. On the flip side, they can trash your credit scores and create expensive debt problems that you may need help getting out of if you’re not careful. The good news is that you’re 100% in control of how those pieces of plastic affect your life.
Manage credit cards the right way and they can set you up for credit success. Credit cards can also help you earn valuable rewards, protect you from fraud liability, and make life a lot more convenient.
The following credit card tips will have you managing your first credit card like a pro in no time:
On-Time Payments Are A Must
35% of your FICO Scores are based on your payment history. Always pay your accounts on time and your credit scores could soar.
Don’t Over-Utilize Your Cards
Credit scores pay close attention to the relationship between your credit card balances and account limits. The closer your card balance creeps up toward your account limit, the worse it generally is for your credit scores.
Be Careful How Often You Apply For New Accounts.
You don’t have to be afraid to apply for new credit when you need or want it. However, if you apply for new accounts too often it might damage your scores.
How to Check and Monitor Your Credit
Don’t skip this step.
It’s smart to keep an eye on your credit anytime, but especially after you start establishing accounts like your first credit card.
Thankfully, it’s simple and often free to check your three credit reports from:
First, you have the right to a free copy of all three of your credit reports once every 12 months from AnnualCreditReport.com. If you apply and are turned down for credit, you may be entitled to more free copies.
Your credit card issuer may give you a free credit score every month as a cardholder benefit through the FICO Open Access Program. There are also a number of websites where you can access free scores, though these often aren’t the same scores used by lenders.
Wherever you opt to check your credit, it’s smart to check all three reports frequently. Credit errors happen more than you probably realize.
The Federal Trade Commission released a study several years ago that found as many as 25% of consumers had errors on their credit reports.
That’s the bad news, but there’s some good news as well. If you find a mistake on your credit report, federal law gives you the right to dispute it with the credit reporting agencies.
You work hard to establish good credit (like opening your first credit card and managing it well). It’s important to make sure that your credit reports are accurate.
After all, you did the work.
Now you deserve the credit for it.
Michelle Black is a credit expert with over 16 years of experience in the industry and a freelance writer.