iQuanti: Credit cards are excellent tools for building credit, extending your spending power, and earning some rewards. But there can be some confusion when trying to get your first one — especially if you have little to no credit score.
Below, we'll walk you through how to apply for your first credit card step-by-step so you can find the best first credit card for you.
1. Check if You Already Have a Credit Report or Score
If you've been an authorized user on someone else's credit card — such as a family member's — you might have a score already. This could help you get approved. Take a look at your own credit score before you begin the credit card application process.
2. Shop Around to Choose the Right Card
There are many features to consider when looking at credit cards:
- Interest rates: The amount you pay to carry a balance. Some cards will come with a low introductory APR for new cardholders, but you may need a good credit score already to qualify.
- Fees: Cards have various fees, such as annual fees and late payment fees that you should be aware of.
- Rewards points: Cards can earn you points redeemable for cash, statement credits, and shopping. Different cards have different rewards structures. Some also offer additional bonuses for new cardholders.
- Perks: Cards also can have features like fraud protection, introductory APRs, and free credit score monitoring.
Thus, it's important to spend some time shopping around for different cards.
Besides these features, there are a few broad types of credit cards to compare:
Secured vs. Unsecured Cards
Secured cards require you to put down cash as a deposit. This deposit becomes your credit line. For instance, putting down $500 gives you a $500 credit line. Unsecured cards don't require a cash deposit. If you get a secured card and make your payments on time for a long-enough timeframe, your lender may offer to change it to an unsecured card.
Student Cards
Student cards are simple cards designed for college students getting their first card and cater to people who are new to credit. They tend to have lower credit limits but are easy to qualify for and offer some rewards.
3. Get Pre-Qualified
Once you find a few good cards, you should seek out pre-qualifications.
Getting pre-qualified is not a formal application. It means a lender offers you terms they expect you to qualify for when you apply later. You undergo an informal credit check — called a soft inquiry — which doesn't hurt your credit.
Sometimes, you'll get a pre-qualification offer in the mail with a code to apply for the offer online. Otherwise, some card issuers have pre-qualification tools online. You can plug in some basic personal and income info to see if you're pre-qualified.
4. Apply
After getting some pre-qualification offers, compare their features and fees. You can then head to the card issuer's website and apply.
This will trigger a hard inquiry, which impacts your credit slightly. However, the effect fades over time, and it falls off your credit report in two years. You only need to be concerned about hard inquiries when you have multiple within a short period of time.
5. Get Your Card
These days, card approvals typically only take a minute or so. If you're approved, you should get a confirmation page and email telling you when your card should arrive. In the meantime, the lender might give you a virtual card number to use while your physical card's in the mail.
Get Your First Card Successfully and Start Building Credit
Getting your first credit card isn't as complex as it might seem, but you have to take a few steps to get a good one. Make sure you check and see if you already have a credit score and report. Then, shop around, compare features, and get pre-qualified for the best cards before applying.
Hopefully, you'll get a great first credit card that can help you begin building your credit score.
Press Release Service by Newswire.com
Original Source: How to Apply for a Credit Card for the First Time
