Question 1

Are you eligible for a first credit card?

Accepted Answer

You must meet a few basic eligibility requirements to open your first credit card account. First, you must be at least 18 to open a credit card account in your name. If you're under 18, a parent, family member, or trusted friend may be able to add you as an authorized user on one of their credit accounts. According to the Credit CARD Act of 2009, cardmembers under 21 must earn enough money independently from a job or regular allowance to cover credit card payments. Otherwise, they need a cosigner, such as a parent or guardian. Credit card issuers generally want to make sure you're financially secure enough to manage your credit card debt responsibly. You may have to provide proof of your employment or another income source as part of your credit card application. The card issuer may also request information about your monthly rent or mortgage payment to determine whether you have enough money left over to cover credit card bills. Finally, you typically need a Social Security number or an Individual Taxpayer Identification Number to apply for a credit card.

Question 2

Are you financially responsible?

Accepted Answer

As a first-time credit card user, it's vital to learn good credit habits, like keeping your spending well below your credit limit, paying your bill on time each month, and repaying your balance in full whenever possible. Overspending may harm your credit score and leave you with credit card debt that's difficult to manage. If you already make strategic, thoughtful decisions about purchases—especially big, expensive ones—responsible practices may carry over into how you manage your credit cards. For example, if you usually stick to a budget and limit unnecessary purchases with your debit card, you may also be less likely to overspend on your credit card. The skills you use to manage your starter card may also help you manage other financial tools, like personal loans and mortgages.

Question 3

Do you understand the basics of credit cards?

Accepted Answer

Knowing how credit cards work may help you avoid some common pitfalls, like overspending or falling behind on payments. A credit card gives you access to a line of credit that you may use as needed, up to your credit limit. Every month, you get a bill for the amount you owe. You have the option to pay your balance in full or make at least the required minimum payment and carry the rest over to the next month. Any balance you carry over typically accrues interest based on your credit card's annual percentage rate (APR). That interest may build quickly, so it's better to pay the full balance when you can. Your card issuer usually reports your credit card transactions and payments to one or more major credit bureaus. Your credit card activity appears on your credit report and influences your credit score. A strong credit score typically helps you qualify for better rates on credit cards, personal loans, mortgages, and more.

Getting Your First Credit Card

Key Takeaways

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