Best First Credit Cards To Build Credit
Whether you are just starting with credit or already have some credit history, there are some factors such as your willingness to pay an annual fee and your employment status that you need to consider. Your goal, regardless of who you are or how much money you make, should be to find the best first credit card for your specific needs and financial situation. You want a card that will assist you in establishing and rewarding good credit card habits from the start.
It has compiled a list of cards that offer the best combination of features for nearly anyone looking for their first credit card, whether they are new to credit or have established credit in other ways.
Other credit card options exist for people with no or poor credit who do not want to put down a deposit. While a credit card can be an easy way to build a good credit history, you must use it responsibly. When you get a credit card, make sure you spend within your means and pay your balance in full and on time.
Methodology for Choosing the Best Credit Cards for Beginners
Expert employs a methodology to identify the starter credit cards that are most likely to meet your needs as a beginner. You can look at annual percentage rates, annual fees, issuer satisfaction ratings, and other factors to see which cards are the best.
How to Select the Best Credit Card?
Before you apply for your first credit card, make sure you’re ready for the responsibilities. This means you have a budget and a system in place to track your spending. When you’re ready to apply for a starter credit card, you must first decide what types of purchases you want to make with the card and how much you can afford to spend and repay each month.
Next, decide whether you want a credit card with rewards. Although you won’t have as many options as you will once you start climbing the credit ladder, some of the best starter cards for building credit offer cash back rewards.
Examine your budget to determine where your major expenses are. This exercise can assist you in locating a starter credit card that will save you money.
Setting and sticking to a limit
Once you’ve decided on a starter card, make sure you don’t go over the monthly dollar limit you’ve set for your card. Setting and sticking to a spending limit will help you avoid overspending, which usually leads to credit card debt.
Secured credit cards are one type of starter card for building credit. They function similarly to regular credit cards, but you must make a refundable security deposit to open a secured card. The deposit reduces the issuer’s risk in the event of a debt default.
Fees of the Secured Credit Card
With a secured credit card, your credit limit is usually equal to your deposit, though this varies by issuer. Many secured credit cards have fees, such as annual fees, late payment fees, and returned payment fees, so you should carefully read the fine print.
If used responsibly, a secured credit card is an excellent way to establish credit. The best credit cards for building credit, whether secured or not, report your payment history to all three major credit bureaus. Before applying for the card, confirm with the issuer that your payment history will be reported to the bureaus.
What You Should Know Before Getting Your First Credit Card?
Even though they feel similar, using a credit card differs greatly from using a debit card. Before you get your first credit card, there are a few things you should consider.
When you use a debit card to make a payment, the funds are deducted directly from your checking account. If you do not have enough money to cover the charge, your card will be declined, and you may be charged an overdraft fee. Each time you use a credit card, you are taking out a small loan. Your card issuer pays the merchant and then expects you to repay the amount.
How to Get The Best Credit Card?
Once you have found the best beginner card, the application process is simple and quick to complete online. To begin applying, click on a card promotion or visit the card issuer’s website. To apply for your first card, you may need to provide information such as:
- Contact information
- Your date of birth and Social Security number
- Financial details, such as your employment status, annual income, and rent or mortgage payments.
It is important to note that the issuer will run a credit check as part of the application process. This will temporarily lower your credit score, so only apply for one card at a time.