How to open your first credit card

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If you’re shopping for your first credit card, congratulations and beware. You are about to begin a journey that will influence what you can buy, where you can live, and what jobs you can get for the rest of your life. If you make a mistake, don’t panic. You will have plenty of time to bounce back, but take it seriously.

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Handled responsibly, this unique card can help you stand out among lenders, employers, sellers and insurers. But if you treat it frivolously, it will be the first step in a long road to being ignored for the best deals and spending more money than you should. Here’s what you need to know.

Understand exactly what you’re getting yourself into – and get into it slowly

Having a card will make you want to use your card, but it would be wise to move into it.

“Using credit cards for purchases can make it much more difficult to stay on a budget than using cash or a debit card,” said Brian Walsh, senior manager and CFP at SoFi. “Studies show that consumers who use cash rather than credit cards tend to spend less money because they are more price conscious and more demanding when it comes to impulse purchases . You are also guaranteed not to exceed your budget.

A credit card is almost certain to do more harm than good if you don’t start with a good money habit, which Walsh says is about staying on a budget, paying bills up front and most importantly. to set aside emergency savings.

“An emergency fund is one of the best ways to make sure you don’t rely on credit cards to make ends meet,” Walsh said.

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Lay the groundwork, identify your card and manage your expectations

Since submitting an application requires a “hard draw” on your credit, the goal is not to cast a wide net. Instead, focus on an individual card that is most likely to accept you and only applies to that one. Many lenders like Discover allow you to see which cards you are pre-approved for without straining before you apply.

At the very beginning, it won’t be any of the popular cards with exotic rewards that you will see famous shilling actors on TV. They are aimed at people with a long, solid credit history. Your credit history – and the score that will measure it for the rest of your life – starts with that first blow, according to Experian.

When you apply, you will need your Social Security number and identifying information such as your date of birth and address, as well as your annual income.

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So how do you get a credit card without a credit score?

The average 18-year-old who builds credit has a score of 631, according to Credit Sesame. That’s probably enough to qualify for a top student credit card or a good consumer card, but you need to be prepared for it. So how do you create credit before getting credit?

  • You may need to start with a secured card, which requires a cash deposit but reports your payments on time to the credit bureaus to help build your credit.
  • Convincing a parent or other established cardholder to accept you as an authorized user is one of the fastest and easiest ways to build your credit. According to Credit Sesame, the average person who uses this strategy sees their nascent credit score increase by almost 80 points in just 18 months.
  • If you have a job, you might want to consider a credit loan, which is a savings account or CD that you set up with monthly payments, which the lender reports to the credit bureaus.

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Treat this card like it’s your only first chance to start strong – because it is

Remember, this is the card that will increase or destroy your credit from the start. Take it seriously.

“Once you are able to qualify for a card, be sure to focus on its responsible use,” said Lisa Fischer, director of loans and growth at Way of missions, a financial services company that caters to borrowers with poor or limited credit history. “Make all of your payments on time and try to contribute more than the minimum payment, or better yet, all of it, if possible given your financial situation. If you only pay the minimum amount owed each month, it can hurt your score and make it harder to pay off future expenses by adding interest to your bill. Plus, be smart with your spending and use your cards for needs, not wants, and don’t be afraid to seek advice if you’re struggling to manage your spending.

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About the Author

Andrew Lisa has been writing professionally since 2001. Award winning writer Andrew was once one of the youngest nationally distributed columnists for the nation’s largest newspaper union, the Gannett News Service. He worked as the business editor for amNewYork, the most circulated newspaper in Manhattan, and as the editor for TheStreet.com, a financial publication at the heart of the Wall Street investor community in New York.



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