Your First Credit Card

Cards That are Easy to Get and Will Help You Establish Credit

Got credit? If you don’t have that all-important piece of plastic, you can’t shop online or make a hotel reservation. Renting a car is difficult at best. And face it, credit cards are just plain convenient to have.

Credit cards that are easy to obtain for those with no credit history:

Secure credit cards To get one of these you need to put down a deposit close to or equal to the credit limit on your card. Banks like them because if you don’t pay, they have collateral. Sometimes secure credit cards are tied to a checking account. And often the accounts are interest-bearing. You’ll receive a lower APR with a secure card. But don’t be tempted to use it as a loan source. As with any credit card, pay the entire balance every month and keep the card as a convenience. Never rely on it to fund emergencies. Start setting aside three to six months salary in case of job loss or other unexpected occurrences.

Department store credit cards Easy to get and they come with a lot of perks. You’ll be the first to learn about sales and other special events. You may even receive preferential treatment when it comes to special orders or layaway services.

Prepaid credit cards It’s like having your own ATM machine. You can load these as much as you want as often as you like, usually online 24/7 or by phone. Watch those fees though. Banks often charge a set-up fee and a monthly charge. But it’s usually only a few dollars. Worth it, if you want convenience without worrying about late fees, over-the-limit charges and interest payments.

Debit cards Be careful with these. You won’t receive the same protection against unauthorized purchases as you would with a credit card. Guard your PIN number with your life. Check your account balance often and watch those over draft fees. When you pay for something the money comes straight out of your checking account. So treat it like a checking account and balance your budget carefully.

Credit cards with a low limit If you apply for a card requesting a very low limit, say less than a 1,000 dollars, you’re more likely to qualify. Banks don’t have as much to risk and may take the chance, even though you have no credit history. But beware; if you go over your limit, the bank will start imposing over-the-limit charges. And before you know it, you owe hundreds, if not thousands of dollars in fees.

The best way to establish credit? Don’t borrow money, pay cash for everything including a car, and when it comes time to buy your first house, you’ll have the down payment saved, when others are still trying to climb out of debt.