Using a credit card enables you to build up a credit score or improve it and it’s a useful addition to your wallet in case of emergencies. But picking your first one can be tricky without the knowledge of which are available to you. There’s a wide range of credit cards on the market, so it’s worth having a look at those available and their particular attributes before applying.
For example, there are credit cards that offer 0% introductory periods for purchases, so you can spend on the card without incurring interest for the time stated. You could also pick ones that offer reward schemes, say, such as cashback on a percentage of your spend.
Getting your first credit card – key points:
- Check the card’s details: Look out for the APR (annual percentage rate), charges for late payments, any fees, the minimum payment due date and the date interest is charged from.
- Limit the number of credit card applications: Applying for too many can damage your credit score.
- Know the credit limit: It’s likely to be low for a first card, so avoid going over it.
What providers need to know
Unfortunately, you may not be able to get the credit card you’d like, as lenders can be choosy about who they lend to – particularly following the credit crunch. Borrowers without a credit history behind them and applying for their first card can fall foul of strict criteria, as they haven’t proved that they have a track record of paying off debt.
It could be worth checking your credit history to see where you stand using one of the credit reference agencies, such as Equifax or Experian. If you’ve taken out a loan in the past, and kept up repayments, this could help in applying for your first credit card.
But don’t give up if you’re rejected by one provider, as there’s bound to be a card out there that will be offered to you. Consider your options carefully though, as applying for numerous cards will leave foot prints on your credit history which can make subsequent lenders less willing to lend.
What cards are available
One option is to apply for a card from the bank that you hold your current account with as it already has access to your financial history and may be more willing to lend. This will still depend on your circumstances however, as if your bank considered you to be risky because you haven’t managed your current account well, it could still be hard to get a card.
There is a range of credit cards on the market that are easy to apply for though, and which you’re likely to be accepted for instantly. However, these tend to be aimed at people with poor or no credit history, and come with hefty annual percentage rates (APRs) and small credit limits.
There’s a wide range of credit cards on the market, so it’s worth having a look at those available and their particular attributes before applying.
If used sensibly, however, with the balance being repaid every month, these cards can prove a useful addition to your wallet as a way to build a credit history. Then, you can apply for a more attractive card further down the line.
As a starting point, comparison sites such as MoneySupermarket make a good port of call.
Once got your card you’re on the first step of the financial ladder and provided that it is used correctly it may help you in future to get important products like a mortgage or loan in the future.
Where to next?