Sooo… apparently there’s this thing called “credit.”
And if you want to do basically ANYTHING, you have to have some, and it’s gotta be “good.”
I have been lucky enough to have parents who helped me build my credit (without me understanding what they were doing) but now that I am an ~adult~ I have decided it is time for my next big girl adventure: getting my first credit card.
But, between choosing a student credit card, getting approved for one, and building good credit … where do you start?
Check out my first credit card tips below for perfecting the credit card newbie game:
What to Look for in a Student Credit Card:
When it comes to student credit cards, research is the easiest part. You are looking for a card that not only fits your financial needs but will benefit from your spending habits.
You need a card with:
No set-up, maintenance, or annual fees. These types of payments sneak up on you, and often without any warning.
Perks and incentives. Especially if you are a student, you are in need of a card that gives you benefits for the charges you put on it — and these cards are plentiful. You can choose from cash rewards, points, or even airline miles if you’re a frequent traveler. There are also many student cards that offer rewards for good grades!
A low interest rate. Because you’re new to credit and having a credit card, finding a company that accepts your application and will give you a super low interest rate is hard to do. The lowest possible interest rate should definitely still be a main priority but hopefully if you are being smart with your money management, you won’t run into issues with having to pay interest anyway. (The goal is to use your card only for building credit and to pay your balance off in full each month.)
Ideally, no or low foreign transaction fees. We talked about this before in our study abroad planning guide, but if you’re planning on traveling abroad, you need a card that won’t charge you an arm and a leg in fees. Take this into consideration when doing your research!
If you’re not sure where to start looking for a student credit card, this Reddit thread has some good recommendations for student cards, plus some good general first credit card tips.
How to Apply for Your First Credit Card:
First off, do all the research above and consider quite a few options before applying or even thinking about opening a line of credit. With each line of credit you apply for, your credit score takes a small hit.
Second, run a credit check on yourself and be diligent and realistic about applying for cards that are within your credit range. (And this is one of the most important first credit card tips: don’t get scammed by “free credit report” sites you see on Google that aren’t actually free! The link above will take you to the official reporting bureaus where you can actually check your credit for free.)
Third, list all your sources of income — it all counts! The good news is, if you are applying for a student card, your income doesn’t have to be high. Student cards are much more accepting of lower scores and income levels — you are a student after all!
What if my credit application is rejected?
So, you follow all those first credit card tips we’ve talked about, do all your research, sell your soul to the devil, beg for a big girl credit card, and you STILL don’t get accepted.
If you’re resolute on getting a card right this second, your best option is a secured card.
A secured card works like a debit card in the sense that you give the bank a certain amount of money and they will give you a card with the same amount. After being responsible with that card it is likely your credit will slowly increase and your bank will re-evaluate the state of your card being secured.
Keeping and Building Good Credit:
The key to keeping and building good credit is to be smart.
Only charge what you can actually afford to pay off in full each month and never ever miss a payment. If at all possible, you should never be carrying a balance month to month. Missing payments and accruing interest are the fastest ways to dig yourself into a very deep financial hole.
If your need for a credit card isn’t dire and strictly for building credit like mine is, set up boundaries for yourself. Restrict your card usage to smaller purchases, like gas, and for emergency situations (AKA those times where I have $10 left on my debit card and don’t get paid for another week and am starving — yup, I’m charging something).
At the end of the day, the key to all of this is being smart, doing your research, and never being afraid to ask for help if there’s something you don’t understand. Your credit follows you wherever you go, so make the most of it!
I want to hear from you in the comments below!
Do you have a credit card? What was it like opening your first line of credit? Have you been successful for unsuccessful? Any first credit card tips for other newbies? Tell us in the comments.