Anyone venturing into the world of credit card financing for the first time needs to be wary. While there are some fair agreements for beginners, there are many enticing offers that are better left for the experienced credit user. And as a first time credit cardholder, your account will carry high interest and penalties as part of the agreement until you’ve proven to be responsible with repaying. Here are some things to watch for when looking for your first credit card.
Define Why You Want a Credit Card
Your first steps in learning to use credit should include a limit that is easily managed. A high credit limit should not be your goal. In fact, it may be a dangerous temptation that draws you deeper and deeper into debt. recycled glass . Many first cards give between $300 and $500.
A credit account, a necessity in today’s financial climate, will help you begin to establish a credit history. If handled responsibly, your credit card management will be a big part of opening doors to buying a new home or car and may even impact your employment.
Bypass the Rewards and Freebies
Reward cards are typically offered to the best customers with good track records. Even if you were approved for one, the interest rates would be even higher than a typical first card, meaning unless you pay the balance off each month you’ll be wasting a lot of money just for the privilege of using a card. Dodge Caravan . On top of that, if you slip up and pay the bill late, you may not be entitled to any rewards you may have accumulated and, even more troublesome, the interest rate may jump even higher.
One way some card issuers try to lure new customers is by offering free stuff. Students are typically targeted for this type of marketing. A free t-shirt is small comfort, if you agree to terms that cause financial hardship for a college student or first time cardholder.
Terms for Anyone Under 21
You must be 21 years old to get a credit card unless someone co-signs for your credit account or can show proof of sufficient income and ability to repay the loan. A cosigner is someone who is willing to sign an agreement to take on the responsibility of paying back the debt incurred if the card holder defaults.
Look for a card with no annual fee and lowest interest rate possible for the longest period you can find. Shop and compare to find the best charge card with the features that meet your needs.
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