When you're ready to apply for your first credit card, keep in mind that it's not always easy to get your first one. Don't rush out and apply for a platinum card with all the bells and whistles -- you're sure to be turned down, and denials look bad on your credit. You might want to consider applying for a "secured" card -- these cards require you to make an initial deposit before you can use the card, and they're a way for you to establish a good payment history without asking a bank to take a risk by advancing money to someone with no credit. Once you've made regular payments for a year or more, you can apply for a more traditional card.
Another option for establishing your credit is to apply for a department store card or gas card and use the card very carefully. While these cards often have high interest rates, they tend to be easier to get approved for. This allows you to get your foot in the door, as long as you carry only a very small balance. That way you can establish your credit without burying yourself in debt. Once you've built a good credit history, you can apply for a regular bank credit card, and a good place to start is at the bank where you have your checking or savings account.
While shopping for the right credit card, apply for one card at a time, and wait a few months between applications [source: Bankrate.com]. Every time you apply for credit, it leaves a record on your credit report, and banks are wary of someone who applies for lots of credit all at once. If you're accepted for a credit card, wait a few months before you think about applying for a second card. Remember that one or two cards is plenty -- having too many cards makes it easier to get into financial trouble, and banks also shy away from someone with too many accounts.
Once you have your first credit card, use it regularly and make all of your payments on time. Don't "max out" the card, but make regular small purchases so that you can establish a good payment history [source: Bucci]. That will put you well on your way to building strong credit.
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- Bankrate.com. "Getting Your First Credit Card." (June 29, 2010) http://www.bankrate.com/finance/credit-cards/getting-your-first-credit-card.aspx
- Bankrate.com. "National Credit Card Rates for July 1, 2010." (July 1, 2010) http://www.bankrate.com/finance/credit-cards/national-credit-card-rates-for-july-1-2010.aspx
- Bankrate.com. "Key Questions to Ask Before Signing Up." May 1, 2006. (July 1, 2010) http://www.bankrate.com/brm/green/cc/cc8.asp
- Bucci, Steve. "How to Build Credit for the First Time." Bankrate.com. Nov. 8, 2002. (July 1, 2010) http://www.bankrate.com/brm/news/debt/20021108a.asp
- CreditCardGuide."Credit Cards with Cash Back." (July 1, 2010) http://www.creditcardguide.com/cashback.html
- Investopedia. "Understanding Credit Card Interest." (June 30, 2010) http://www.investopedia.com/articles/01/061301.asp