Credit cards have become an indispensable part of modern-day life. They certainly make it much easier for common transactions (like paying for gas directly at the pump), but they’ve also become practically mandatory for transactions such as renting a car or hotel room.
In recent years it’s become more difficult for young adults to obtain their first credit card. Not only have some credit card companies been taking a closer look at their applicants and being more selective in granting cards, but recent legislation has made it more difficult for students to get their first credit cards while still in college.
Here is some information and advice on how to get that first credit card.
Check With Your Bank. The first place to try to get a new credit card is at your local bank. If you’ve had a checking account or savings account with the bank for several years, then they’ll already have important information about your financial picture and credit worthiness, and may be able to approve your application.
Check With Local Credit Unions. If your local bank isn’t an option you should investigate the offerings at a local credit union. The operating charters of credit unions are focused on serving the community rather than generating profit. In fact, credit unions are required by law to operate as nonprofits, so you might be able to secure a credit union credit card even if your bank turns you down.
Consider Secured Cards (If Necessary). Depending on why you are looking for your first credit card, you may wish to consider a “secured” card. Secured cards are usually part of the Visa or MasterCard networks, so they are accepted everywhere normal credit cards are. But secured credit cards require that you keep a certain amount of money on deposit with the entity that issues the card. Your credit limit will generally be equal to the amount on deposit. For example, you might deposit $500 with the card issuer (which will stay on deposit), and your card will have a $500 limit. These cards don’t do much to help you build your credit rating, but they do provide you with the convenience of a credit card.
Check Your Credit Report. Even if you’ve never had a credit card before, there’s a good chance you have a credit score based on your underlying credit reports. Your payment history on your student loans, as well as any overdraft coverage you’ve used on a checking account or any late payments you’ve made to your electric company or cable company, will be on your credit report. Before you apply for your first credit card, you should get a copy of your credit report to make sure that there are no mistakes that could impact your credit card application.
If you’re still having trouble getting your first credit card, don’t get frustrated. Continue making good financial decisions and paying your bills on time. The more you do to establish yourself as being financially responsible, the more likely you’ll get approved for a credit card the next time you apply.
Credit cards have become an indispensable part of modern-day life. They certainly make it much easier for common transactions (like paying for gas directly at the pump), but they’ve also become practically mandatory for transactions such as renting a car or hotel room.