There will come to be a day in every person’s life where they decide to open up their first credit card, whether to begin improving their credit score or to shop. Choosing which one shouldn’t involved random selection, but rather an in depth look at which card will work best for you and your goals.
One key aspect to consider is whether the bank will be charging you an annual fee, and if so, how much? Now, this can get tricky to balance because sometimes cards with higher annual fees have better benefits than one with a lesser annual fee. Try to figure out which is going to save you more money in the long run. This can range anywhere from $20 – $500. However, most starter cards will have lower limits and most likely lower annual fees.
Obviously, one of the most popular credit cards are the ones that provide you with cashback rewards, but you can also find credit cards perfectly tailored to your needs. From anywhere to airline miles to grocery, to gas, these cards are especially effective if you notice high spending in one of these areas, leading you to greater rewards. A starter card probably won’t have better benefits, but it will at least help you get something back from your spending.
Secured vs. Unsecured
Secured Credit Card
A lot of people opt to go with a secured credit card when first opening an account. Some people’s credit requires it. This just means that you have to put an amount upfront equal to your credit line (usually). If you’re just looking to build credit, this is perfect. You can just pay it every month and see improvement.
Unsecured Credit Card
However, if you can’t afford that, you can also look into unsecured cards. These ones don’t require a deposit, but they’re harder to qualify for and may have higher annual fees. Decide which method works best for what you’re hoping to achieve.
Limited Time Offers
The most common limited time offer you’ll see is 0% interest for the first however many months. If you’re looking to make a big purchase that you plan on paying off within that time frame, this is excellent for you. Paying it off before the time period ends will mean you won’t have to pay an extra dime, and you got to spread your payments out.
You may also find cards with extra cash back for a period of time, and these can be beneficial if you are looking to see a quick return on those rewards.
You probably don’t want to go to a shady bank because you’re desperate for a credit card. you want to ensure that you’re going to have proper assistance throughout the process of using your card effectively, and you don’t want any unexpected problems to arise. If possible, stick to major bank names you’ve heard of.
Designed for You
There may be cards specifically intended for situation. The most common are student credit cards. If you’re a student looking to begin to build your credit, this is obviously a great place to start.
If you’re still with parents, you could discuss with them getting a credit card linked to their account to learn responsibility with money and get a head start on your credit.
No matter what you choose, just be sure to weigh all pros and cons before going with something that sounds better. You may have better results with a card that emphasizes your needs and goals more effectively. This may require sacrifice, but with time and effort, you’ll find the perfect first credit card.