So you finally reached 18. Awesome. As a legal adult, you can finally vote and, most likely, you’ll be headed off to college sometime soon. Also, ta-da!, you can finally get a credit card of your own.
While congratulations are in order, a little bit of caution is as well. Indeed, instead of jumping feet first into the deep end of the pool and getting herself several credit cards, you should probably just focus on getting one and making sure it’s the best for your needs and situation.
Now, we hate to sound like your mom, but the fact is that even though you’re old enough to get a credit card, you might not actually be ready to get one. Having credit means being responsible enough to use credit, well, responsibly, and not simply run up credit card bills beyond your ability to pay them back.
In fact, one of the worst things you can do for your credit (which, by the way, is vitally important) is to go into debt up to your eyeballs because you didn’t realize just how much you had spent on your credit card.
With that in mind, here are a few pointers for getting your first credit card and using it responsibly. Enjoy.
First, in order to actually get your first credit card at 18, you need to have verifiable income that a bank or other lender can check, or else you’re going to need a cosigner. Also, since this is your first credit card, you won’t have any “credit history”, one of the primary factors that most credit card companies look at when you send in your application.
That means you’ll need to get yourself a job and have some type of steady income, even if it’s just part-time, in order to get your first credit card. Again, without it, you’ll need a cosigner.
Next you need to find the best lender, and the best card, for your particular needs. Most of the major credit card companies have what they call a “student credit card” but, frankly, sometimes even though this sounds like a good idea, the higher interest rates and annual fees they charge can turn it into a bad one.
If you’ve had a checking or savings account in a local bank, getting a credit card through them will probably be quite a bit easier, especially if you’ve been responsible with either one of those two accounts.
Then there’s a credit card from a retail or department store, and you can be sure that most of them will bend over backwards to give you one of their cards. However, most retail credit cards come with very high interest rates and aren’t very versatile, limiting what you can purchase but encouraging a spending spree that might just damage your credit badly.
In some cases you might need to start off with a secured credit card, which basically is like a debit card in that they secure it using your money. If you do that, and then can show a history of using it responsibly and paying your money back on time, most lenders will switch you to an unsecured credit card within a year or two. By the way, your credit report doesn’t show if a credit card is secured or not, so getting one doesn’t damage your chances of getting another, unsecured credit card.
Finally, don’t be discouraged if you don’t get approved right away. As a new adult, most banks and lenders will be a bit wary of giving you credit because, frankly, they don’t know whether or not you can handle it. If you can, and you’re responsible with your credit, you’ll find that a world of credit opportunities open up to you that can help you to purchase what you need and also save money on interest rates and fees when you make big ticket purchases like automobiles and homes in the future.