Woman holds a credit card and looks at a laptop screen with her partner

Credit Cards for Beginners

Published February 8, 2022
7 min read

Credit cards can be powerful financial tools. You can use a card to earn rewards, get access to helpful features, and pay for purchases over time. But credit cards can also be confusing, especially for first-time users.

Before you get your first card, find out what you’ll need to apply, which type of credit card could be a good fit, and how to get the most out of your card once it’s in your wallet.

What you should know before applying for your first credit card

Credit card companies don’t approve every application, and your ability to get a card can depend on your credit score, income and other factors. You’ll also need to meet the minimum requirements for the card.

Generally, you need:

  • A U.S. address
  • To be at least 18 years old. 
  • A Social Security number. Some credit card issuers accept Individual Taxpayer Identification Numbers as an alternative.
  • Income: Applicants who are under 21 years old must have an independent ability to repay the loan to qualify for their own credit card.

Assuming you can meet the credit card issuer’s requirements, there are a few steps you can take to get ready to apply.

Check your credit score

You can try to check your credit score to get a sense of which cards you may qualify for. However, if you’ve never had a loan or credit card, or been an authorized user on someone else’s credit card, you might not be “scorable.” Don’t worry if that’s the case—some credit cards are designed to help you get started.

Calculate your income

Credit card applications will ask for your income, which the card issuer can use to help determine your ability to pay.

Your income can come from a variety of sources. Examples include wages, salary, or tips, you currently earn or can reasonably expect to earn. Other examples include bonus pay, commissions, and income from rental property, interest, dividends and retirement benefits paid. If you’re 21 or older, you can also include another person’s income that is available to you. If you are under 21, you can only include your own income to demonstrate an independent ability to repay.

Compare credit card features and fees

You don’t have to apply for a credit card from a financial institution where you already have an account. It could be worthwhile to compare several credit cards before applying. Consider the cards’ rewards, benefits, fees, and potential interest rates.

See if you’re pre-approved

When you submit a new credit card application, the resulting credit check could add a hard inquiry to your credit report, which could impact your credit score. Before applying, see if the credit card issuer will let you submit a pre-approval request. The results can show you which cards you’ll likely qualify for without impacting your credit score. But if you apply for a pre-approved offer, the credit card issuer will likely place a hard inquiry on your credit report.

Starter credit cards for beginners

Many people open their first credit card when they don’t have a high income or long (if any) credit history. Knowing this, credit card issuers offer several types of credit cards that could be good starter credit cards.

Student credit cards

student credit card works just like a regular credit card, but it’s only available to students who are enrolled in higher education programs. These generally don’t require a strong credit score or high income, and many student cards don’t have annual fees. Some of the best options include rewards and student-specific perks.

Secured credit card

secured credit card requires you to send the card issuer a refundable security deposit after you’ve been approved for an account. The deposit may determine your credit limit, and the card issuer can apply the deposit to the unpaid balance if the cardholder doesn’t pay their bills.

Generally, you’ll get the full deposit when you close your account as long as you’ve paid off the entire balance. But with the Discover it® Secured credit card, you can get your deposit back after six consecutive months of on-time payments and maintaining good status on all your credit accounts, and if you qualify Discover will increase your credit line.1

Store credit cards

Retail or store credit cards are another starter option. However, the cards tend to have low credit limits and high interest rates. Also, with some store cards, you’ll only be able to use the card at the associated store.

Authorized users on someone else’s credit card

Instead of applying for a card on your own, you could ask a trusted friend or family member to add you as an authorized user on one of their credit cards.2 Some credit card issuers report credit card accounts to the credit bureaus under both the primary and authorized users’ names.

An authorized user account might help you build credit history when the account is used responsibly, which may help you qualify for a credit card of your own. However, if the person doesn’t responsibly use their card, they could wind up harming your credit because the negative activity will be reported to your credit report.

As an authorized user, you could receive a physical card that’s connected to the account. But discuss the arrangement with the primary cardholder before you use the card. While you might be able to use your card, the primary cardholder is responsible for the bill.

Tips for getting the most out of your first credit card

Learning how to use a credit card wisely can take time. As a rule of thumb, it can be smart to treat it like a debit card — don’t use it to buy something you can’t afford to purchase with cash. But you’ll also want to know the ins and outs of your card, and learn how interest works, in case you need to pay off the balance over time.

Pay the bill on time and in full

Paying your credit card bill on time can help build responsible financial habits. To count as an on-time payment, you need to make at least the minimum payment by the due date. Missing the due date can lead to a late payment fee. And falling 30 or more days past due can lead to a late payment on your credit report, which may hurt your credit score.

Most credit cards offer a grace period, which means you won’t pay any interest on your purchases if you pay the balance in full and on time every month. However, if you pay less than the full credit card statement balance, the remaining balance will “carry” or “roll” over to the next billing statement. Once this happens, the rolled-over balance and your purchases start to accrue interest daily.

Use your card, but keep a low balance

Unless you track your budget closely, you might be surprised to find that the small purchases you made throughout the month turned into a big bill. Consider setting up a budgeting app or using your card issuer’s mobile app to keep an eye on your balance.

A low balance can be helpful in several ways. First, it can help ensure you’ll be able to pay your bill in full and avoid paying interest on purchases. Additionally, your balance relative to your card’s credit limit, known as the utilization rate, can be an important factor in your credit score. A low “utilization rate,” such as under 30%, can be best for your credit scores.

Learn about the card’s rewards and benefits

If your card is part of a rewards program or offers cardholder benefits, learn about the programs to make sure you’re not missing out on valuable perks. For example, Discover cards come with a spend analyzer and Freeze it®, which you can use to freeze your account to prevent new purchases, cash advances, and balance transfers in seconds.3

Should a credit beginner apply for more than one starter credit card?

Credit cards may  offer different rewards or perks, which can make opening more than one card tempting.

However, it’s also easy to overspend or accidentally miss a payment if you’re trying to manage multiple credit cards. It might make sense for you to start with one card and only apply for another once you’ve mastered your first card. 

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