Ahhh, the concept of having credit cards. We hear mixed reviews and viewpoints of having them. Are they good to have, yes, just 1 or 2 though, having too many will make you spiral out of control. Are there negatives to having them, of course, but read on to learn more about credit cards.
“I need to get a credit card,” you might be thinking. “It’s the only way I can make online purchases and buy things without cash.” This is true, but there are also some serious drawbacks if you’re not careful with them!
This blog post will help explain what you need to know before opening your first credit card account so that you’ll have all the information necessary on making informed decisions about which are some good credit cards for personal use.
The American credit card industry is worth $1.2 trillion, and it’s growing every day. There are so many different types of cards to choose from that it can be hard to know what you should get. Here are some things you need to know about credit cards before applying for one.
Your first credit card – what you need to know, is a blog post that discusses the basics of acquiring your first credit card. We’ll discuss what you should consider before opening your first account, as well as how to use it responsibly for everyday purchases. It will also cover some of the risks and benefits of using a credit card, and when it may make sense to start using a debit card instead.
Do you need a credit card?
You might be thinking, “I don’t want to get into debt.” But what if we told you that with the right credit card, you can actually save money? What if we said that with the right credit card, your purchases could help build your credit score and even earn rewards points for things like travel or cash back. Interested now?
We know it’s hard to find the perfect balance between security and convenience when choosing a new credit card. That’s why our team of experts has done all the research for you. We’ve compiled this list of top-notch cards so that finding one is as easy as possible. All you have to do is choose which one suits your needs best!
There are two main types of credit cards: charge cards or revolving accounts (which allow the user to carry a balance) and installment loans (which require users to make payments monthly).
Charge cards don’t give buyers any interest while revolving account holders will pay interest on their balances if they don’t pay off the entire bill each month.
Installment loans tend not only to incur more interest than charge cards but also have higher fees for late payments.
All the Info You Need to Know About Credit Cards
Why are you applying for a credit card?
This can be different for many but the most common answers are to apply for a job, use it for emergencies, or even to rent a place to live.
It’s a good idea to save your credit card number in your cell phone, or write it down and store it somewhere safe – just as you would with any other important information.
When using your card for everyday purchases, never spend beyond what you can afford to pay back at the end of the month.
This means not spending more than 15% of your available balance on each purchase. Paying off those bills on time will help establish a history of responsible use and lead to better terms and conditions over time (i.e., lower interest rates).
Your monthly statement should arrive around the same time every month so that you stay organized but don’t leave payments sitting too long because they’ll be assessed an extra fee.
Applying for that first credit card was surprisingly easy. You just had to complete an online application and click to submit. In a few minutes, you became a credit card holder thanks to instant online approval.
You still had to wait for the actual credit card to be delivered by snail mail, but when it arrived you felt “official.” As you learned in your online credit card research, the best way to establish credit is to get a credit card in your name, make purchases and then keep up the payments.
Sounds simple, right? You fill out an online application and then you shop. You can do that. But then the monthly statement arrives and each month it gets scarier to open it. How did it go from a proud moment to one you dread each month?
You may have been tempted to go out and use your new card for a big purchase, but resist that urge.
A few quick tips
- Use your credit card only for purchases you can afford to repay in full.
- Pay off the balance each month and never go over your limit.
- Stay within a spending limit if possible by tracking all of your monthly expenses.
- Put as much money as possible towards paying down balances on higher interest cards first before consolidating them into one lower rate card with a longer-term fixed payment plan.
That’s what we are here to talk about. To make your life easier and your credit card journey more manageable, remember the following:
Apply for a secured credit card with an established company like Capital One or Wells Fargo. It will help build up your credit score while locking in rates that work for you – not some high-interest rate bank committed only to “risky borrowers.”
Consider putting purchases on the best rewards cards out there before applying for one of those cards without any perks (which may be all they can offer). This is because reward points can be redeemed as cash back, gift certificates, etc.
Let’s say you go out and spend $100 on new clothes for school. You don’t have that much money in cash, but you got some great deals – so you put it on your credit card. After all, you need clothes and a credit history, so why not do both at the same time?
That’s basically a good idea, but it loses something in the cost factor. That $100 in charges is subject to a 21% interest rate. Remember the interest is applied monthly on the balance, so even after making a $10 minimum payment faithfully over 10 months, you still owe money.
How can that happen? You paid almost $20 or two additional payments to “rent” the money to buy your clothes for nearly a year. Your new clothes may go out of style before you finish paying for them.
What if you need a car for your new job? If you put $1000 down, then finance it with the same interest rate and length of time as your clothes purchase – that’s another $100 in monthly payments just to drive.
So be very careful about what credit cards you get and how much money goes on them. Your first credit card is an important decision – don’t mess it up!
Imagine what a financial bind you’d be in now if you spent $1,000 on that new stereo system. Pay close attention to the APR (Annual Percentage Rate). That’s the price you pay to charge on your credit card.
You want to make sure your APR is low, but not too low. The lower it is the less you pay in interest. But if a company’s rate goes up faster than your credit score improves, then that card may be more trouble than what you bargained for!
And here’s a bit of a shocker – if you have a variable interest rate, the bank or financial institution can raise your interest rate as much as they want to – any time they want to – without warning!
If your new job doesn’t come with a car-then use public transportation or buy one at auction before getting an auto loan on your first credit card.
“Your first credit card will open many doors of opportunity.” Well, true enough; hopefully these tips will help you avoid slamming any unwanted doors shut
“That doesn’t seem fair – no one told me!” Yes, they did tell you. It was fully disclosed in the Terms and Conditions section that you agreed to without reading. If you have no credit history or a bad credit history, don’t expect to get as good of a deal on APR as someone who has a good credit history.
If you are a student, your parents can add you as an authorized user to one of their cards. This will allow the card issuer to look at your credit history and decide if they want to offer you a card with them. Keep in mind that this is not necessary – it’s just another option for those who have no other options.
What’s all this talk about APR? Simply put: The Annual Percentage Rate (APR) tells how much your balance will change over 12 months based on interest rates set by the lender or institution that issued the credit card – which could be anywhere from 0% up to 29%. Now here’s where it gets tricky: Fixed APRs remain constant
In the credit world, you’re rewarded for being financially responsible. Try to make more than your minimum payment each month to show that you’re more than responsible with your charge card.
Keep your eye on transaction fees
Watch out for credit card providers who charge a monthly fee or an annual fee. You might be better off with one that doesn’t have these types of charges. After all, the more you pay in finance charges and other service fees, the less there is left to cover your balance – which means it will take longer to get rid of what you owe.
So What Should You Look For in a Credit Card?
- Low monthly and annual fees
- Competitive interest rates, especially when it comes to balance transfers
- Secured credit cards for those with limited or no credit history
What you need to know before you open your first credit card. Have a chat with your parents about what they think is best for you! Make sure to weigh the pros and cons of different products before choosing one that’s right for you.
Financial literacy skills are important tools in life – start early! Parents can help teach their kids how money works by having conversations around budgeting, saving, borrowing, etc. You’ll thank them later on in life 🙂
How often do credit card companies report my score to the credit bureaus?
This varies, some report every 3 to 6 months. Being responsible with how much credit you use can be to your advantage when it is reported within 3 months.
What is the difference between a secured credit card and non secured credit card?
A secured credit card is an option for those people that cannot get approved for a higher interest rate, while non-secured credit cards can be used by anyone a secured one can be hard to get when you are just starting out. I applied for this type to ensure I only spend a certain amount. It allowed me to set my own credit limit so I don’t get overwhelmed with paying it off.
You need to disclose any past bankruptcy and judgments against you as well as unpaid taxes in order to qualify for approval (this might sound scary but there are lots of great lenders out there!) Also remember that even though they offer high limits at first, these will usually decrease every few months until it reaches zero – so make sure you read the fine print!
With a secured card, many don’t look at your score while a non secured one definitely looks at your score.
What are the reasons to get a credit card?
It teaches you how to spend responsibly, and provides a sense of financial independence. Credit cards can offer rewards points or cash back for every dollar spent.
For some, having a card allows them to use it in an emergency. Having one specifically for true emergencies can give you peace of mind.
For others, not only will it help them create a credit footprint but that footprint is needed in order to rent a place to live or even secure certain jobs.
What are some reasons not to get a credit card?
The first major drawback of having a credit card is that it can easily lead to overspending. It’s so easy when swiping your way through life-it feels like buying something will never cost anything at all! If you have an expensive lifestyle, this could spell trouble for you in the long run.
One of the biggest reasons is that you might not have any idea if you’re going to spend too much money and can go into debt.
A second drawback of owning a credit card is that it doesn’t work well as emergency spending money; most people don’t carry their cards around with them every day just in case they get lost.
Every card you get can almost guarantee you will have some sort of debt, especially if your mindset is that it is free money.
Having access to your own credit card can give you a sense of responsibility which will help teach you about how important it is to be financially wise. But you don’t want to learn the hard way!
What are the problems that can happen with using a credit card?
Some problems that could come from using a credit card are not understanding how interest works, maxing out your spending limit, and getting into debt.
Taking on more debt than you can handle.
If you tend to make payments late on other bills, then a credit card can get you into more financial trouble.
A major disadvantage is that most people use their credit cards as much like debit cards these days; they do not carry cash around anymore since they would rather just swipe their credit card at checkout instead of paying cash.
t’s easy for a credit card balance to mount up and become difficult or impossible to repay. For example, if you spend $500 in January but don’t make any payments that month, by February the debt will be $550 because of the monthly interest rate charged.
What fees should I be aware of before I apply for a credit card?
An annual fee is an upfront cost that you’ll have to pay when the card starts.
As with any other type of account, there are also late payment penalties and interest charges associated with revolving balances.
Make sure to be aware of what those rates might be before applying! These can add up quickly over time and eat away at your savings if they’re too high or carried for too long
Credit reporting agencies collect information about how responsibly people use their money from lenders in order to decide who gets approved for new loans; this includes everything from whether someone pays on time to how much debt they usually carry on a regular basis.
Credit Karma is a good app that can give you an idea of your credit utilization.
How do I know which credit cards are right for me?
The answer to this question is a matter of your personal preference, but the most common types are credit cards with an annual fee, rewards cards that offer cash back, or frequent flyer miles for each dollar spent and secured credit cards.
A low introductory rate on purchases and balance transfers can be tempting – check out the fine print before you sign up though! These rates usually change after six months or so. It’s important to know what your plan looks like down the line so you don’t get stuck paying more than expected in interest charges over time
To make sure we’re all talking about the same thing: revolving balances refer to how much money individuals borrow from their credit card company while purchase limits reflect how much someone has available for spending within those guidelines
How do I get a credit card if I have no credit history?
It’s a common misconception that credit cards are only for people with good credit scores. In reality, there are many ways to get your first card:
- Apply at the mall and pick one up in person
- Order it online through your bank or company where you already have an account
- Secured credit cards are great starter cards
What do I need when applying for my first credit card?
Your social security number – home address – employer information – birth date – annual salary
Another thing to consider is how much of your personal budget you want tied up in monthly payments (e.g., cell phone bill vs car payment) so that you
How do I get a credit card after my identity was stolen?
Can I get a credit card after identity theft? And will it help me fix my credit? It is easier to get one of those secured credit cards to help rebuild your credit.
- Get your credit report and make sure all the information on it matches what you know
- Call customer service to discuss any discrepancies
- Write to the company to let them know about the discrepancy and ask how to remove the infraction from your report.
I used Lexington Law to help me go through my credit report after I learned my identity was stolen. They helped me learn the ins and outs of credit repair. They were able to help me get a fresh start. They did all the legwork for me when it came to contacting each company about identity theft.
Tips about how to manage credit responsibly:
It’s important to only spend as much as you can afford (e.g., don’t max out your cards!) – plan ahead so that you never overspend again!
Don’t open your first credit card until you’re more financially literate
Credit cards are a great way to build up your credit score – but only if you use them responsibly. take some time and learn about how they work before opening one!
Pay more than the minimum due. Paying the minimum can have you paying more than what the purchase was actually worth. This is why every credit card purchase needs careful consideration.
How many credit cards should I have, how many is too many?
If you’re looking to get that first credit card, it’s important to know how many is too many. I recommend just having one to start with. Then as you learn about your spending and payment history habits, maybe getting a second one. I personally only have 2 credit cards, I don’t want more than that.
Why It Might Be Wise To Wait A Few Months Before Getting Your First Credit Card
The unfortunate news is there are some risks associated with getting your first credit card and managing your money responsibly. For example: Identity Theft as well as fraudulent purchases can occur when dealing with a new account.
There are also fees for activating and maintaining your account – so make sure you understand all of the potential costs before applying! If you’re not ready yet, for these charges, then i recommend waiting a little while longer before committing.
What you need to know before opening your first credit card.
The most important thing is your spending habits. If you can’t control your spending, it might not be a good idea for you to open a credit card as this will only make the situation worse and could lead to debt problems in the future.
It’s best if you find out how much money you have coming in each month so that you never exceed more than 15% of what comes in (usually after paying your bills). This means that there should always be some money left over once all monthly expenses are paid off – otherwise known as an emergency fund!
Achieving creditworthiness usually takes time, but responsible use of your spending will make all the difference.
There are some things that can lower your creditworthiness such as making late payments or not paying off your balances in full each month. There’s also something called “utilization ratio” which means how much of your available funds is being used on a given day – ideally less than 15% every month!
A credit card could help build up your good habits and make it easier for you to improve upon those over time with practice – but only if you use them responsibly. If this business model doesn’t work for you then it’s best to stick with cash or a secured card so that at least there is more control of your spending.
Why does my APR go up up if I am making on-time payments?
Why does my APR go up? This can happen for many reasons. One may be that you missed payments in the past or had too high of a balance ratio (the amount owed as compared to your total limit).
You’ll most likely want to avoid this by paying off your full balances every month and also staying away from using more than 15% of your available funds each month.
What are ways to avoid credit card fees or lower the fees so I am not over paying fees?
Don’t use your card for cash advances, balance transfers, or overdraft protection. these all come with a fee that can be avoided.
Look into credit cards without an annual fee and find the one with no foreign transaction fees so you are not paying extra to buy things outside of your country.
Find out what late payment fees will cost, if any – this is something that nobody wants but it’s good to know in advance before incurring them by forgetting to pay on time or missing the due date because it was sent somewhere else than where your mail goes
Make sure there isn’t a minimum monthly load amount like most banks require – get rid of those high-interest rates by finding a bank/credit union that doesn’t have them.
How do I lower my interest rate on my credit card?
The first thing you need to do is make sure your credit score is in the best shape it can be. No one wants a high-interest rate on their card, and this starts with making sure your FICO score (the most commonly used scoring system) reflects positively on you.
This will not only help lower your rates but also qualify you for other types of loans or financial products that are out there. Once you have the basics down, then start researching which cards offer the lowest interest rates available – some might even offer 0% introductory deals!
And lastly, don’t forget to read all terms and conditions so you know exactly what’s being offered before signing anything; these offers come at a cost usually related to fees like annual membership or
What is a FICO score and why I should be aware of it?
Ever wonder what a fico score is? A FICO score, which stands for the Fair Isaac Corporation, is one of the most common types of credit scores. It’s a number that ranges from 300 to 850 and it predicts how likely you are to repay your debts. The higher your FICO score, the more likely lenders will be willing to loan you money and give you better loan terms like lower interest rates or longer repayment periods.
One of the most important things to know before opening your first credit card is how your FICO score will affect your interest rates. The higher you can keep this number, the more likely it is that you’ll be able to get a low-interest rate on your new card and other loans in the future. Keep reading for tips on getting a good FICO score!
A credit score can be defined as an individual’s “creditworthiness” based on their history of borrowing. Your credit report includes information about your repayment history, how much you owe, and the types of loans that you have applied for.
When lenders receive this information they use it to determine your credit risk and decide whether or not to lend money to you. The most well-known type of these scores is the FICO score which was developed by the Fair Isaac Corporation in 1989.
- Your FICO score will decide what credit card you’re approved for when applying
- Your FICO score can also affect the interest rate on your loan or mortgage application
- There are a number of factors that go into calculating your fico score and if one is off, it could lower your rating
- A fico score is a number that ranges from 300 to 850
- It predicts how likely you are to repay your debts
You should check with the bank before opening an account to learn about their scoring criteria. but generally speaking, having good payment history accounts in collections (paid as agreed) will help raise your scores while missed payments (not paid as agreed), delinquency (when you miss more than six months of regular monthly payments) and public records are not so helpful. For example bankruptcy filings, court judgments against you, or past due child support.
A Few Starter Credit Cards to Check Out
What are some good credit cards that i should check out?
One of the best credit cards that you should consider is the Chase Sapphire. One of its biggest advantages is that it offers a points system, which means your spending can earn you rewards in different ways.
Open Sky – This is a secure line of credit, which means you can only spend what you put into it. I have mine set at $350, not too much not too little. It is enough to use in an emergency but not too high where it becomes overwhelming to pay off each month.
– another good card to look at would be the CapitalOne Quicksilver Card, as this also has no foreign transaction fees and an annual fee of only $39 (waived for first year)
Chase – Chase offers different types of cards. Read through each before selecting which is best for you.
Credit cards are a great way to spend money without having to carry cash or write checks. However, they can have some drawbacks for the consumer. For example, if you don’t pay off your balance at the end of each month, then you will be paying interest on it (which is expensive). In this blog post we’ll discuss the pros and cons of carrying credit cards so that you can decide whether or not it’s right for you!
Conclusion paragraph: Your first credit card can be a great way to build your financial future. I hope I provided some helpful tips and tricks so far about how to apply successfully now that you understand more about why this is important in building a strong FICO score going forward.
Want more tips on credit cards? Read How to Increase Your Credit Score in 5 Steps.