Choosing Your First Credit Card

Caution should be used by anyone looking to get started with his or her first credit card. The industry provides a ton of different offers geared towards beginners, along with many attractive offers that should only be used by the more experienced credit user. First time card holders will have to prove they can handle the responsibility of repaying borrowed money before they are rewarded with lower interest rates. High interest is just one of the burdens of being a first time card holder. When choosing that first card, here are a few tips to keep in mind. Reasonable Credit Limit One of the first tips about handling a credit card is keeping reasonable limits. While you may be tempted to go after a high line of credit, it is wise to start at a relatively low starting point. This way the temptation to spend and spend will be halted quickly. Generally speaking, first time borrowers are given a $300-500 limit to begin. If for some reason you’re provided a large credit line, I seriously recommend setting a smaller limit on yourself. Self control and responsible credit management will provide more opportunities along the road of life. We live in a world dependant on credit for purchasing homes, cars and other large items. Begin your credit history by making positive decisions and you will be afforded more open doors at an earlier age. Say No to Reward Cards Credit cards with rewards tends to be offered to customers with a proven credit history. This doesn’t mean first time card holders never hold these types of cards, but it is less likely. If you do happen to get offered a reward card, I would turn it down. The interest rates are already high for a first time card holder and will be even higher on a reward card. One slip up on this type of card and you lose the rewards anyway. The chances of getting rewards in relation to the high interest is just not worth it. Students are frequently targeted with freebies to lure them into signing up for a particular credit card. Students make up the largest numbers of new credit card holders. Be careful not to get pulled into a temptation to spend by holding cards not needed. The freebie will do you no good if the cards get you into financial hardship. Age Limit and Terms The limit for holding a credit card is generally 21 years of age. One way to obtain a card earlier is to get a co-signer or be able to prove sufficient income and thus the ability to pay back any borrowed funds. Make sure you have a clear understanding of all the contract terms you are agreeing to prior to signing. Obviously you want a card with the lowest interest rate possible. When choosing a card, make sure the interest rate marketed all over the mailing is the actual rate you are getting. Many times the rate you see in big, bold characters is only a introductory rate…meaning it only last for a specific time frame before they hike it up to the actual rate you are getting. If you are agreeing to a introductory rate, know how long the rate is, what it’s going to change to and what other factors may cause you to lose the intro rate early.