It is important to weigh the advantages and disadvantages when choosing a credit card for your first time. There are many factors you need to take into consideration, including the annual fee as well as credit limit, cosigner option and credit limit. The best option for you will depend on your own individual circumstances and goals.
Low or no annual fees
Applying for a no-fee credit card is a great way to start building your credit history, even if you have less-than-perfect credit. No-fee loans are especially beneficial for people with poor credit histories or those who have just established their credit. These cards can be used to build credit that will enable you to get a better mortgage or car loans.
Many starter credit card programs don't have annual fees, and they are easy to apply for. These cards offer a variety of perks and rewards depending on the terms. Some cards don't require annual fees for the first year. However, some cards have higher interest rates.
Before applying for your first no-fee credit card, you must check your credit report to determine if you qualify for this type of card. Your report will include information on your credit history and any student loans you may have. This information can be used to establish your credit score. It is an important number that financial institutions use when making loan decisions.
Credit limit very low
When applying for your first credit card, it is not uncommon to receive a low credit limit. It is due to many factors. Your age, income and credit score all determine the credit limit you will receive. Most credit cards will limit you to $500 to $1,000 for your first application. You may have higher limits if your credit score is good.
It is important you know that credit limits vary from one person to another and that yours may increase with time. You should not exceed your credit limit as it can lead to negative consequences. There are a few strategies you can use to get a higher limit for your first credit card.
Before applying for credit cards, check your credit score. A high credit score is a sign that the issuers have trust in you, and they will increase your credit limit. A second thing to do is make sure you pay your balances on the due date. If you find it difficult to pay your bills promptly, you can request a new card with a higher limit.
Option for co-signer
Even though you might be tempted to apply for a jointly-issued credit card through a family member or friend, there are serious risks involved in cosigning with a shared account. A joint account may have a lower credit limit and not all banks report activity. A co-signer, who can see the cardholder’s statement, is responsible for paying the debt if the cardholder does not make the payments. Late payments can hurt the co-signer's credit.
You should ensure your friend/family member is financially sound and responsible when you apply for your first card. Bad credit can make it difficult to get approved. However, having a cosigner will improve your chances of being approved for a second credit card.