How to Get Your First Credit Card
Why would you need a credit card?
Before we go into how to get a bank card, it’s worth thinking why you’d want one in the first place.
When it comes to getting your first credit card, keep in mind that while it provides you with flexibility, it also comes with a great deal of responsibility.
Credit cards can be a wonderful tool for helping you manage your money, and there may be short-term benefits to using bank cards for shopping and borrowing. However, understanding how to use a credit card is crucial in order to prevent being stung by exorbitant costs.
What are the advantages and downsides of using credit cards?
There are various benefits to using a credit card, as long as you only spend what you can eventually afford to repay. These are some examples:
- Spreading the cost of equipment across a period of time
- Developing a credit history or raising your credit score
- As a reward or perk, you can earn money or air miles.
- Purchase item insurance in case the vendor goes bankrupt
However, there are certain disadvantages to using a credit card that should be considered:
What exactly is the function of a credit card?
Credit is money borrowed, whether by bank card, loan, or overdraft.
When you apply for a credit card, the lender will do a credit check to see how risky you are as a borrower.
If you are approved for a credit card, they will assign you a credit score limit. Your credit score limit is a set amount of money that you can use to pay for goods or services.
If you have a continuous steadiness, you repay the money you borrowed each month, in part or in full, with interest added. There is a minimum payment required, however it is preferable to pay the full amount so you will not be charged interest.
Is a credit card required to build a credit score?
You are unlikely to have a credit score if this is your first bank card or the first time you’ve borrowed money.
As a result, banks and lenders will consider you to be a high-risk borrower. This is because there is no verification of what type of borrower you are. This may limit the number of credit cards you can receive as well as the credit score you can obtain.
You must use your first bank card responsibly and on a regular basis to enhance your credit score.
A better credit rating will come in helpful in the future if you need to borrow more money for a larger purchase, such as a house or automobile.
Even if you’re a first-time borrower with no credit history, you still have options. If UK debtors study how to get a credit card, they will discover that the application process is simple and stress-free.
If you are considering getting your first credit card, the ideas and facts shown here may be useful. Discover how to apply for a credit card and what to look for while selecting one.
Who is qualified to apply for a credit card?
You must be at least 18 years old to be eligible for a bank card. However, you should double-check because certain playing cards have a lower minimum age.
Most providers will only accept credit card applications if you accomplish the following:
However, borrowers should be aware of another essential step. To ensure acceptance, UK debtors should start building the groundwork for their first credit card as soon as possible.
The goal is to ensure that you are in the best financial condition possible before applying. This boosts your chances of being approved for the primary credit card you select.
How to Increase Your Acceptance Chances
There are a few basic actions you may take to improve your chances of getting a credit card. These should be your initial steps before looking into how to get a credit card.
These are some examples:
Adding your name to the electoral list gives proof of address, which may help your credit score.
Getting a job: Even if you just work part-time, having a consistent source of income shows lenders that you are capable of repaying credit. You may have problems obtaining credit if you are not working.
Opening a checking account: Having a checking account will help you increase your chances of acceptance. Set up direct debits and start saving money to show lenders that you are financially responsible.
Pay your bills on time: If you can show that you have been paying your bills on time for at least six months, lenders will consider this proof of financial responsibility. It may persuade them that you are trustworthy enough to repay the credit score.
A guide to selecting your first credit card
There are several types of bank cards. Each is best suited to a particular form of borrowing, and choosing the appropriate credit card to fulfil your needs is critical.
You may be looking for one with a low interest rate to assist you in repaying your current bills. Or maybe you want one with benefits that match your way of life.
If you are a first-time borrower seeking for assistance on how to get a bank card, a credit score builder card could be an excellent choice.
Credit card to help with credit expansion
If you are applying for your first bank card, you are most likely to get approved for a credit builder card.
For anyone residing in the United Kingdom, this is a great first bank card. They’re also useful for people with bad credit who want to improve their credit.
Credit builder cards often have low credit score limits ranging from 100 to 250. They also have higher-than-average interest rates, ranging from 24% to 50% or even higher.
As you use and repay your credit card on a regular basis, you will establish a track record as a responsible borrower. You may be able to obtain another type of credit card once you have a long enough credit score history.
How to Apply for a Non-Credit-Score-Building Credit Card
A credit builder card is a prerequisite for consideration for one of these other sorts of cards. Although you may not be able to receive any of these on your first bank card, you may be able to after a long period of time with a credit builder card.
Pay attention to how to get a bank card initially, then concentrate on how to manage it wisely. After you’ve completed that, you should be able to consider one of the following cards:
0% on purchases: This means that you will not be charged interest on your card purchases for a defined period of time.
0% on stability transfers: If you had another credit card with a stability that charged you an APR, you would transfer it to a 0% deal to avoid interest.
0% on money transfers: This allows you to transfer a significant percentage of your card balance to your checking account. Normally, there is a transfer fee associated with this.
Air miles: If you spend a particular amount on your bank card, you will be rewarded with air miles.
Benefits include cashback, which offers you a percentage of what you spend back. This could be 0.5 percent, for example.
What to consider when applying for your first credit card When comparing bank cards, it’s important to keep a few key factors in mind. This will enable you to choose which card is best for you and provides the greatest value.
The interest charged on your credit card is the cost of borrowing money from the lender. When comparing credit cards, look for the ‘Representative APR.’
This is the rate offered to at least 51% of customers who receive the card. It is not simply the rate you will be provided; it is mostly affected by your financial status and credit history. As a result, the next lower price than the one listed would be offered to you.
Some credit cards offer low or even 0% introductory interest rates for a limited time.
They revert to the regular variable fee after that. While they might be handy for spreading out the cost of purchases, make sure to payback your steadiness before the introductory rate expires.
The credit card limit
This is the most you can borrow on your credit card. Like the APR, your credit score limit is decided by your credit history and finances.
You may not be awarded a large credit limit as a first-time borrower. Keep in mind, however, that if you consistently pay your bills on time, the lender may offer to increase your limit. If they don’t supply, there will be a procedure for requesting an increase.
Fees You should be aware of any additional fees that may be levied. Late fees, foreign transaction fees, and cash withdrawal fees are examples of these.
Managing Your First Credit Card
Before you use your first credit card, keep in mind that you should aim to pay off the entire balance each month.
You may avoid paying interest while still taking advantage of the card’s benefits, such as raising your credit score.
Aim to set up a direct debit payment to settle the entire sum every month, if possible. This eliminates the need to manually pay off the credit card debt and lowers the danger of late payments.
How to Get Your First Credit Card
You can apply for a bank card online, over the phone, in print, or in person. You should utilise an eligibility checker before applying for a credit card to determine your chances of acceptance.
Applying online is the most convenient and time-efficient method. You only need to fill up a software form on the provider’s website. If you use this method, you could get approved in minutes.
The following information is typically required by bank card companies:
- Name and postal address
- The date of birth
- Salary and employment situation
Do not, under any circumstances, apply for a similar card again. Most providers will continuously refuse you if you reapply within six months.
Here’s how to increase your chances of acceptance the next time you apply. You’ll be a more enticing borrower if you build your credit history, pay your payments on time, and keep your finances in order.
You may enquire as to why your software was rejected by the lender, but they are not compelled to inform you.
Alternatives to credit cards
If your application is denied or you decide to obtain a credit card, you have a number of options to consider, including:
Obtaining a debit card that allows you to pay as you go.
Taking use of your overdraft facility (be conscious of the charges that may apply)
Short term loans
Making a short-term loan application