If you’ve never had a credit card before, you may feel confused about where to get a card since you don’t have a credit history, or you may be familiar with credit card offers but don’t know what you should be looking for. What is the best credit card to start with?
Secured Credit Card
If you have never had a credit card or if you’re trying to rebuild after financial difficulty, the best credit card to start with is a secured card. To get approved for a secured card, you’ll need to deposit money into a savings account which serves as security for the money you borrow. Since this means there’s no risk to the bank, it’s usually not hard to be approved for a secured credit card. Your credit line is typically equal to the amount of money you deposit, and it gives you an opportunity to start building a credit history of making payments on time.
Retail Store Card
Retail stores may have lenient requirements for being approved for one of their cards. If you apply for one of these cards, pay attention to the terms you’re agreeing to. While a retail store card allows you to begin to build a good credit history, they often charge a high interest rate and may have an annual fee.
Many credit card companies have special opportunities for college students that are new to the world of credit. If you’re a college student, you may be approved for a small credit line and you may be offered incentives for good grades.
Building Good Credit
No matter where you get your first credit card, it’s important to be responsible for how you handle it. Always pay your bills on time, because late payments can make it more difficult to be approved for credit in the future. A single late payment can follow you around for a long time since negative information stays on your credit report for seven years.
It’s a good idea to pay more than the minimum payment whenever you can. If you can pay back the whole balance you charged within a couple of weeks, you may be able to avoid paying interest on what you’ve borrowed.
Don’t borrow more than you can pay back without difficulty. Try to avoid borrowing more than 30 percent of your available credit.
What’s on Your Credit Report?
Every year, you’re entitled to a free copy of your credit reports. This is available from AnnualCreditReport.com. If you’re just starting out building your credit, you shouldn’t see any other accounts on your credit reports. If you see any accounts you don’t recognize, you could be a victim of identity theft.
Misinformation of any kind should be disputed immediately. At Dovly, we’re committed to helping people protect their credit. We’re an automated credit repair engine, and we can help you track, manage and fix your credit. This includes helping you dispute and correct credit report errors. Get in touch with Dovly today.