If you have never been in debt before, then getting your first credit card can be hard. Strangely, lenders trust people who have been in debt and paid it back more than people who have never had any debt.
Although it may seem hard to get a card if you have not gotten one before, there are some ways to get a credit card. If you are unsure about how to go about getting your first credit card, then this article might be able to help you.
Check your credit report
The first thing you need to do is to check a copy of your credit report.
This will tell you if you have any problems with credit, and if there are any errors you can clear them up. If your credit rating is good then you should have no problem getting a card.
It’s important for every consumer to learn what a credit score is and how to improve it. Most consumers do not know what their credit scores are! But these are the scores used by credit card companies.
Credit scores are usually calculated by a computer model known as the Fair, Isaac & Company (or “FICO,” leading to the common generic term “FICO score”).
A credit score is intended to be a predictive summary of an applicant’s credit history. A low score can mean denial of a credit card or, or if the application is accepted, a higher interest rate. Also, some lenders use credit scores and other information to set the “price” for processing fees.
Statistically, low credit scores also correlate with other risky behaviors such as fraud and auto accidents.
Consumers can obtain their credit scores from various companies for free. These companies provide the score, the range of possible scores under the scoring model used, four key factors that affected the score, the date on which the score was created, and the name of the entity that provided the score.
Note that the score and the scoring model provided may vary from those a given lender uses. Federal law allows consumers three free credit reports every year.
If you get your credit score from one or more credit scorers; remember that the score may vary from one credit score company to the next.
Inker Street offers several recommendations to consumers seeking to improve their credit scores with some great Debt Consolidation Strategies.
Apply to your bank
Once you have established that your credit rating is good, then you should apply for your card. The first place you should start is with your bank. If you have a full-time job and have had no credit problems, then you are likely to get a card.
Now that you have a card you can use it and if you pay your bills on time. Then, slowly your credit limit will get better.
If your bank will not give you a credit card, you can improve your credit by getting a store card. Although these cards have very high rates; if you spend a little on them and pay it back then your credit will quickly improve.
One thing that you should avoid is applying for lots of cards at once. If you do this then acquire an inquiry and your credit rating will be further weakened.
Applying for lots of cards makes you look financially unstable and will harm your chances of getting one good card.
Beware of ‘unbeatable’ offers
When applying for a card you might feel the best offers are the ‘amazing’ deals you get in the mail. These deals offer you really low-interest rates and tell you that you have been pre-approved already.
All they mean by this is that you are pre-approved to apply, but you can still be turned down! And, even if you aren’t you are unlikely to get the rates they quote.
If you are going to pay your balance each month then the interest rates at first do not matter. Apply to a company you know and trust and that will be fair when you want to renegotiate terms.
One of the best ways to get your first card is to get a secured credit card. This involves you paying a money deposit that is frozen whilst you have the card.
This reduces the risk for the lender, and if you show that you can pay your bills then you can get upgraded to an unsecured card quickly.
Never pay fees
One thing you should avoid when getting your first card is to actually pay for it. Although secured cards require a deposit, there are other companies that charge myriad fees before you get hold of the card.
If this is the case you may find just the fees eat half of your balance up, which almost defeats the point of getting the card. Even if you are getting a card for the first time you should not have to pay for the privilege.
Credit cards are an excellent way to help you manage your finances each month.
Used wisely, they are an excellent financial tool along with Household Budgeting. Used unwisely and people will quickly discover that their credit cards can rear their ugly heads and cause long-term financial problems.
But credit cards aren’t all bad. If we could live our lives without them, we would. But we can’t. The world is simply not built that way anymore.
More and more often, companies require credit cards as the best way to receive payment or security, rather than cash or checks.
But a credit card is just a loan. Few people realize it as such, but that’s all it is: Simply a loan that you can use if you want, but you don’t always use it.
A credit card is like a constant line of credit that is represented by the piece of plastic you carry in your wallet or purse.
It says to the shop owner that someone has checked you out and deemed you worthy to receive a certain amount of credit line in order to purchase the product offered for sale.
Used wisely, a credit card is an excellent financial tool.
The first advantage a credit card offers is the ability to manage your finances. This means that you can buy things you want or need and defer payment until you choose.
If you have a credit card that provides you with reward points or rebates or discount opportunities, an advantage that credit card offers is to help you leverage your current purchases by building up points or generating discounts on the money you spend.
The third advantage a credit card can offer you is the additional layer of purchase protection. Some credit cards come with an extra insurance package so that purchases you make it any retailer are also covered by the credit card.
The fourth advantage a credit card can offer you depends on the credit card you get. Some credit cards offer travel insurance, car rental insurance, and even concierge services for a small fee.
Depending on how busy your life is, or how often you travel or rent a car, having these advantages built into your credit card may be a wise financial decision for you.
A credit card is just an ongoing loan to you represented by a piece of plastic.
But used wisely, this loan can offer you much more than other types of loans.
Credit cards are not always bad. Consider whether you should add a couple to your financial portfolio.
Are you ready to get your first credit card? If so, check out the resources recommended to you by Inker Street Consumer Credit Advice.
- Household Budgeting: Will show you how to stick to your budget. So, soon you will have a monthly surplus, and you will see your savings start to grow.
- Debt Consolidation Strategies: When it comes to debt consolidation, you need to practice techniques that are a little unique and very much focused on getting you out of debt within a stipulated period of time.
- Debt Destroyer: Finally you can fully equip yourself with these “must-have” tools for busting debt and live a life without having to worry about debt collectors!