My First Credit Card

bac_cash_visa_cardI know I know. Credit cards are of the devil. The problem is that I need credit. I’ve recently discovered that I have no credit. None. Nada. Zip. If I ever want to buy a house or a “new” car (which I will definitely have to do in the near future), I will need credit. Since I am a credit virgin, getting a credit card was not the easiest thing to do. I don’t know if you know this, but most credit card issuers want you to have some credit before they give you a card. I spoke with a friend (one of my financial experts) about how to get a card and what to look for and avoid once I have one.

What to Look For

No Annual Fee – When looking for a credit card, the first thing you need to look for is one without an annual fee. Why should you pay to use money? That just sounds ridiculous.

Low Interest Rate – You should look for the lowest interest rate that you can get. This isn’t always easy as rates are based on your current credit, but still do your research to find what best suits you. Even if you, like me, plan on always paying it on time just so you can build credit, you still want something with low rates just in case.

Get the Best Deals – Lots of card companies will try to offer you a deal. They want you to use their card so they’ll try to reel you in with cash back rewards or mileage points. Just make sure that you’re not paying more for those deals.

What to Avoid Once You Have a Card

Late Payment – This is a given, but many people overlook it. Avoid late payments like the plague. It’s never a good idea to pay late. Ever. You get penalized on your credit, you have to pay a fee and you have to pay the interest. Just don’t do it. If you you know you won’t have the money to pay it back, don’t buy it in the first place.

30-50% – Don’t ever max out your card. That does not show that you are a responsible person. Credit bureaus don’t just look at your payment, they also look at what your spending to credit available ratio is. You want to try to stay between thirty and fifty percent of your available credit.

These are all great rules to follow when getting your first card. The problem: If you have no credit, you’ll have to settle a little more than if you do have credit. Since I have no credit, I was only awarded with a secure credit card. That just means high interest rates, an annual fee, low credit available and a security deposit. Those all suck, but if you’re like me and you have no credit, then you’ll have to settle for a not so great card, at least until you have built some credit. The plus side is that I get cash rewards, so I’m at least making a little bit of money.

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