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How to Get Your First Credit Card

Applying for your first credit card can feel like applying for your first job. Even entry-level positions want two years of experience.

Building a strong credit history can open other financial doors later in life, so it is important to start early. While you might be allowed to get a credit card once you turn 18, you may have a hard time finding a company that will issue you one.

Are You Ready for Your First Credit Card?

Like getting your driver’s license, your first credit card is a responsibility that many take for granted once they have it. It’s easy to forget how dangerous a car (or card) can be when used incorrectly.

Before applying, understand how misusing a credit card can damage your credit in both the short- and long-term. If you currently don’t stick to a budget and overspend on a debit card, it might not be the right time to get a credit card. Focus on building good money habits and then when you feel more confident in your spending consider applying.

How Do I Get a Credit Card With No Credit History

It can feel like every card issuer is looking for good credit when you are applying for your first card. If you are between the ages of 18 and 21, and currently aren’t earning income, you may have a hard time getting approved. But there are solutions specifically for those with little to no credit history or income.

Read more: How to Build Credit in 6 Easy, Smart Steps

Become an authorized user on your parents’ or loved ones’ credit card

If you have a willing friend or family member with good credit, becoming an authorized user on their account may be a great step to building your own credit. You don’t even need to use the credit card once your information has been added.

Not all credit card providers report authorized user accounts to the major credit bureaus. Before becoming an authorized user, check with the card issuer to confirm that your good spending habits will be recorded.

As long as the primary user continues to practice good credit habits, your credit will grow alongside theirs. However, this also means that if they are not practicing good credit habits, your score will reflect these poor practices. Keep that in mind when considering who to ask.

Apply for a secured credit card

If becoming an authorized user on a family member or friend’s credit card isn’t an option, a secured credit card is a strong alternative. After being approved for the secured card you will deposit an amount of money into an account offered by the card issuer. Your line of credit will match this deposit amount.

This might sound like a debit card, but a secured credit card will count towards your credit history. Some card issuers may offer a ‘graduation’ component. After you have established a credit history with the secured card you may be eligible to transition into the issuer’s traditional unsecured credit card.

Apply for a student credit card

If you are enrolled in college or just graduated, you might be able to apply for a student credit card. The income requirements are often not as high as a standard credit card, and the credit limits are low to encourage good borrowing habits. However, student cards often have high interest rates and annual fees, offsetting the risk the lenders take on by offering a card to student borrowers.

How to Use Your Credit Card Responsibly

Now that you have your first credit card in hand, make sure you use it responsibly. This could be your first steps to building your credit, so build a strong and solid foundation.

Never skip a payment, pay off the balance in full each month

Banks now have tons of payment reminders through text or email, so there is no excuse for not paying your bill on time. Never skip a payment and always pay off the full balance for the card each month. In 2018 the average interest rate for credit cards hit 17.21% APR. Treat your credit card as a debit card, and only spend what you know you have the budget for.

Use your credit card for needs, not wants

It can feel like the world is your oyster when you get your first card. You could buy anything in your credit limit, but it isn’t a good idea. Buy only the things you need to, stay within your budget. Especially with your first card, staying away from overspending will set up good habits for when you do have more income and want to save up.

Read more: How to Read Your Credit Report

This article was written by Carolyn Pairitz Morris, Senior Editor at Earnest.

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.