How To Get A Credit Card For The First Time In 5 Steps

If you’re a young adult just starting out or have never had a credit card before and are curious about how to get one, you’ve come to the right place. Getting approved for a credit card, even without any credit history, is simpler than you may imagine. We’ll walk through the step-by-step process, so you can begin building your credit and experiencing the advantages of having a credit card.

1. Check Your Credit Score and Report

Before applying for a credit card, it’s recommended you check your credit report and score. This will give you an idea of where you stand financially and help you identify areas for improvement. Improving your creditworthiness increases your chances of being approved for a credit card. To get your credit report, visit a reputable credit reporting agency's website and enter your personal information, such as your name, address, and social security number. When you get your report, please review it carefully for any errors or discrepancies. This is important because banks use this information to assess your creditworthiness. You should get a copy of your full credit report from each of the three major national credit bureaus: Equifax^®, Experian^TM and TransUnion^®. There are also many free online resources that can quickly check your credit score, giving you a better idea of where you stand. Lenders typically reference your FICO^® Score, which includes the following factors:

• Payment history (35%)
• Credit usage (30%)
• Age of credit accounts (15%)
• Credit mix (10%)
• New credit inquiries (10%) 

As shown above, payment history significantly impacts your credit score, followed by credit usage. It's a good idea to keep credit utilization to 30% or less, maintain open accounts, have a mixture of different credit accounts, and limit credit inquiries for new credit lines when possible. Sometimes you will find items on your credit report that need to be disputed, and you will need to reach out to the right parties to dispute those charges.

2. Learn How Credit Cards Work

If you're considering getting a credit card, it's important to do your research. Take the time to understand how credit cards work and the different lender requirements. This knowledge will help you make informed decisions and find the right card for your needs. Additionally, it's crucial to understand the responsibilities that come with having a credit card, such as making regular, on-time payments. By being aware of these responsibilities, you can manage your card effectively and avoid any negative consequences.

It is important to know that every card comes with its own set of unique terms and conditions. You should look at those carefully before submitting your application and signing up for any credit card. The most common terms to note include:

• Annual fees: recurring fees that organizations or institutions charge yearly for various services or memberships.
• Credit limit: the maximum amount of money a borrower can borrow from a lender.
• Annual percentage rate (APR): a measure of the cost of borrowing, expressed as a yearly interest rate, which considers not only the stated interest rate but also any additional fees or charges associated with the loan.
• Repayment options: the different methods for borrowers to repay their loans.
• Interest rates: the percentage charged or paid for the use of money, typically expressed as an annual percentage rate; plays a crucial role in determining the cost of borrowing and the return on investments.

3. Pick The Best Credit Card For You

Now that you know how a credit card works, it's time to explore different options to find the one that suits your needs. There are several popular offers available to consider. One attractive feature of credit cards is rewards programs. These programs allow you to earn points or cash back on your purchases, which can be redeemed for various rewards such as travel or merchandise. Another option to consider is low-interest cards, which offer a APR on purchases and balance transfers. This can be beneficial if you plan to carry a balance on your card or want to consolidate high-interest debt. By researching and comparing different credit card offers, you can find the one that best fits your financial goals and spending habits.

4. Submit Your Application

Because you've learned about the requirements for a credit card and have done one of the hardest parts choosing the card that best fits your needs, it's time to gather the information you need to apply. These are some important details you may need to provide on your application:

• Gross income
• Employment status
• Social Security number
• Access to your credit score

Take your time with this step. Make sure that all the details you provide, from your personal information to your financial data, are precise and current. It's wise to go over your application thoroughly before submitting it, as a small amount of extra effort at this stage can prevent future problems. Keep in mind that accuracy is key, so invest the necessary time and attention to avoid complications later.

5. Receive Your Decision

Once you receive a response from a credit card issuer, there are a few steps you can take to move forward. If your application was accepted, congratulations! You should activate your new card as soon as possible and review the terms and benefits it offers. Creating a budget and using your card responsibly to build a positive credit history is also a good idea. On the other hand, if your application was denied, don't worry. You can request a copy of your credit report to understand the reasons for the denial. Take this opportunity to improve your credit score by paying bills on time and reducing debt.

Tips For Using Your First Credit Card Responsibly

Congratulations! Now that you’ve been approved for a credit card, it is important that you keep track of your spending and maintain a good credit score. As a new credit card user, it is important to understand how to maintain good credit or improve your credit scores. Here are some tips to help you on your credit card journey:

• Make regular, on-time payments
• Make more than the minimum payment
• Keep credit utilization ratio low
• Keep an eye on and dispute any errors on your credit report
• Avoid interest charges
• Consider your options before closing old credit cards

Credit Card Requirements FAQs

Now that we’ve reviewed the steps to get a credit card for the first time, let’s look at some additional common questions and answers.

How can I get a credit card with no credit?

One option is to get a secured credit card, which requires depositing a certain amount of money as collateral. Alternatively, you could become an authorized user on someone else's credit card to benefit from their good credit history. Finally, you could explore credit cards designed specifically for people with limited credit history, such as student credit cards or cards offered by credit unions.

What credit score do I need for a credit card?

The credit score required for each card will differ depending on the card’s featured and the lender. To give yourself the best chances of approval, you should aim for a FICO^® Score above 700, although lenders may have slightly lower or higher requirements for different products.

What age can I get a credit card?

Age requirements for credit cards vary by country and institution. To apply independently, one must be at least 18. People under 18 can build credit as authorized users or with secured cards or a co-signer.

Will applying for a credit card hurt my credit score?

Applying for a credit card can potentially impact your credit score, but the extent of the impact depends on various factors. When a credit card application is made, it triggers a hard credit pull, which can impact your credit score by a few points. This is because hard inquiries indicate that an individual is actively seeking new credit, which lenders may see as a risk if there are too many hard credit pulls within a short period of time. On the other hand, soft credit pulls do not affect credit scores and usually occur when a person checks their credit or when a lender pre-approves them for a credit offer.

Is it bad to apply for multiple credit cards?

It is generally not recommended to apply for multiple credit cards simultaneously. Applying for multiple credit cards at the same time can negatively impact your credit score as each application triggers a hard inquiry on your credit report. It is better to apply for one credit card at a time, allowing you to manage your credit and increase your chances of approval carefully.

How often can I apply for a credit card?

The regulations regarding how often you can apply for a credit card vary depending on the financial institution. Generally, waiting at least six months between credit card applications is recommended to avoid a negative impact on your credit score. However, it's important to note that everyone’s financial situation is unique, so it is advisable to consult with a financial advisor to determine the ideal waiting period for your specific circumstances.

The Bottom Line: Make Sure You’re Ready To Open A Credit Card For The First Time Before You Apply

As you can see, understanding how credit cards work and what your current credit report shows is crucial for anyone applying for their first credit card. Knowing the ins and outs of credit card usage can help you make make informed decisions and avoid potential pitfalls. Building good credit can help you qualify for better interest rates and loan terms in the future. It also provides financial stability and opens opportunities for various financial endeavors. The Rocket Money℠ app can help you monitor your credit before and after you open a credit card. If you need help checking and protecting your credit, download the Rocket Money app today.