How to choose a credit card for the first time?

By | December 12, 2021

Credit cards are one of the most convenient ways to pay for items you need. Credit card companies offer various options and can be tailored to your needs. Credit cards are an integral part of our society, but choosing which credit card is right for you can be difficult.

Credit Cards come in all shapes and sizes, so you must know what kind of credit ( Credit Score) you have before applying for a new card or opening up an account with a different company.

Credit scores range from 300-900, where 800 or above is considered perfect. The higher the score, the more likely they are to get approved for certain types of offers like rewards points or no interest rates on balance transfers.

For example, if someone has low credit (under 650), they may be limited to credit cards with poor rates and high fees. Credit scores come from a variety of different factors, but the most important ones are payment history, your total debt compared with how much available credit you can use at any given time, the average age of accounts on file, new line openings within the last year or two years (depending on the scoring model), and several hard inquiries on file.

In this blog post, we will go over how to choose a credit card for the first time and what to consider when picking one out.

What’s Ahead

  1. What credit are cards available for me?
  2. Consider what you’ll be using the card for?
  3. Should I get-a rewards card or an everyday card?
  4. Research interest rates and fees?
  5. Find a card that will help build your credit history?
  6. Review all terms and conditions.
  7. Compare cards based on features, not just price.
  8. Don’t forget about fraud protection?
  9. Understand how rewards work before choosing one.
How to choose a credit card for the first time
How to choose a credit card for the first time

What credit are cards available for me?

When looking for a credit card, the first thing you want to do is look at what is available. Credit Card companies offer various options and can be tailored to your needs. You don’t want to apply for a credit card not meant for someone with your Credit Score.

There are two types of Secured Credit cards and Unsecured Credit cards. Secured credit cards are a great way to build credit, as they have benefits that others do not offer. With a secured credit card, you are required to put down a security deposit that becomes your Credit Limit. This is an excellent way for someone with bad credit (300-650) to start working on rebuilding their score.

Unsecured Credit cards do not require a security deposit but come with greater risks for the Credit Card company. Suppose you have good or excellent credit (700+). In that case, an unsecured credit card may be the best option for you as they offer more rewards and bonuses than secured cards.

Read More: Credit Card vs. Prepaid Card: How Do You Know Which Card is Right for You?

Consider what you’ll be using the card for?

When looking for a Credit Card, you also want to consider what you will be using the card for. For example, if you will use the card for everyday purchases like groceries and gas, then a Cash Back Credit Card may be the best option for you.

Cash Back Credit Cards offer rewards in the form of cashback on all of your purchases. This can be a great way to save money on things you would normally buy without a credit card. If you are looking for a Credit Card with no annual fees, then a Cash Back Credit Card is probably your best bet.

If you want to transfer a high-interest balance from another Credit Card company, then a Balance Transfer Credit Card may be the best.

Read More: How old do you have to be to get a credit card with a parent?

Should I get a rewards card or an everyday card?

This is a question that many people struggle with when choosing their first Credit Card. Do you want to get a card that rewards you for the things you buy, or do you need a basic card to build your credit?

The best way to figure this out is by looking at your spending habits. If you don’t think you will use the rewards, then maybe getting an everyday card is better.

However, if you know that you will spend money on groceries, gas, and other items, getting a rewards card may be better.

Research interest rates and fees?

Before applying for any Credit Card, you must research the interest rates and fees. Each Credit Card company offers different rates and fees, so you want to ensure that you are getting the best deal possible.

For example, some Credit Cards offer a 0% introductory APR on purchases or balance transfers for a certain amount of time. This can be a great way to save money on interest payments. However, after the intro period is over, the APR can jump significantly.

Make sure that you know what the regular APR is before applying for any card, and also make sure that you will be able to pay off your balance in full each month. This will help keep your credit score high and avoid paying large amounts of interest.

Find a card that will help build your credit history?

Another thing that you want to consider when choosing Credit Cards is if the card will help build your Credit History.

For example, Credit Card companies offer Credit Score Boosting Credit Cards targeted towards people with bad credit (300-650). These cards have benefits like lower interest rates and higher limits than other Credit Cards.

This can be a great way for someone who has no established Credit History or poor scores to start building their Credit Score again.

Review all terms and conditions, so there are no surprises when it comes time to pay your bill each month.

Credit Card companies must disclose all fees and interest rates before signing up for the Credit card. However, it is always a good idea to review all of the terms and conditions so that there are no surprises when it comes time to pay your Credit Card bill each month.

Compare cards based on features, not just price.

It’s vital to compare the characteristics of each credit card, not just the price while selecting one. Some Credit Cards provide rewards for purchases you make, while others give cashback. Some cards have no annual costs, while others charge excessively high fees. Before making your selection, examine all of the features on each card carefully. This will guarantee that you receive the greatest possible bargain.

Don’t forget about fraud protection?

Another thing that you want to consider when choosing a Credit Card is whether or not the card offers fraud protection.

Many Credit Cards offer fraud protection which can help protect you if your Credit Card information is stolen or used without your permission.

Understand how rewards work before choosing one.

One of the most popular ways to save money on everything you buy is through credit card rewards. However, it’s critical to comprehend how they work before signing up for one.

For example, some Credit Cards offer cashback on the purchases that you make. This means that you will get a percentage of your purchase back in the form of cash. Other Credit Cards offer points that can be redeemed for gift cards or other items.

Make sure to read all of the terms and conditions related to the rewards program so that you know exactly how it works. This will help ensure that you get the most out of your rewards Credit Card.

What should I do after receiving my first credit card?

  • Keep a low balance
  • Make at least the minimum payment each month
  • Pay your Credit Card bill on time every month

If you follow these simple guidelines, you will be able to maintain a good Credit Score and avoid any unnecessary fees or interest payments.

Conclusion

Congratulations! You’ve taken the first step to becoming a responsible adult and choosing your own credit card. Whether you just got out of college or are an executive looking for a new business card, picking the right one is not easy.

We understand that there are many different types of cards to choose from, but we hope this article has helped make it easier by explaining what each type offers regarding rewards programs, interest rates, fees, and more.

If you have any questions about which type might be best for your needs, please let us know below in the comments section.

FAQ

  1. What Credit Card should I get for the first time?

    There is no one “right” answer to this question – it depends on your individual needs and preferences. You may want to include what type of rewards the card offers, whether or not there are any annual fees, and what the interest rates are.

  2. Does it matter which Credit Card company I choose?

    No, all Credit Card companies are required to disclose their terms and conditions before you sign up for a card, so make sure to read these carefully. However, some companies may offer different benefits or perks, so it might be worth considering Credit Cards from different companies if you’re looking for something specific.

  3. Aren’t all Credit Cards the same?

    No, there are many different types of Credit Cards available on the market, and each one can have very different rates depending on what type of card they offer as well as other benefits that may or may not apply to your situation.

  4. Which Credit Card company is best for me?

    It’s a good idea to compare many Credit Card offers before deciding which one will work best for you since this depends largely on your individual needs and preferences. For example, some cards offer cashback while others provide points towards gift certificates with certain retailers. You’ll also want to look at any fees that might be associated with the card, as well as the interest rate.

  5. How do Credit Card rewards work?

    Rewards Credit Cards offer different benefits depending on the company and type of card. Usually, you’ll earn points for every dollar that you spend, which can then be redeemed for gift cards, travel miles, or other items. It’s important to read all of the terms and conditions related to the rewards program so that you know exactly how it works.

  6. What should I do after receiving my Credit Card?

    There are a few things you should do to maintain a good Credit Score and avoid any unnecessary fees or interest payments:

    A. Keep a low balance – try not to charge more than 30% of your Credit Limit.

    B. Pay off the balance at least once a month – this is key!

    C. Avoid carrying too much debt on any Credit Card since doing so can cause your Credit Score to drop significantly. The best idea would be only to use one card for emergencies and charge no more than 30% of its limit or $100 (whichever is greater).

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Author: Dhiraj Jha

Hi, I am Dhiraj Jha— the founder of a leading personal blog website. I’m an experienced financial expert pursuing my main in personal finance. I have completed my graduation from the Institute of Chartered Accountants of India (ICAI). I always wanted to do something big and better, and today I’m here with my passion for helping people utilize their resources wisely. I love to acquire, review and earn reward points/cashback from credit cards, which help me travel worldwide and stay in luxurious hotels. 

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