Why Care About First Time Credit Cards?
The idea behind getting first time credit cards is to help establish a credit history as well as a credit score. Unfortunately too many people use it without really thinking about how much they are spending. Yes you go out a buy $100 on some new clothes, but are you really thinking about the fact that you $100 to the card company or are you saying to yourself the I can make the $15 a month payment on this without a problem?
Just think about that for a moment, you say, “it’s only $15 a month for about seven months”. Is that really the case? No. It actually will work out for you to pay back $15 a month for about 10-12 months. Depending on the interest rate that you receive from the card issuer. It can range anywhere from 13% all the way up to 29%. So if you buy a $100 dress at 25% and take twelve months to pay it off in full. You will have actually paid $125 for the dress that was on sale and you thought you were saving money by buying it. Too bad that’s not the case.
The concept of having a good credit card is changing as each generation becomes old enough to start building credit. Many young kids today don’t really learn how to handle credit in a responsible way. Many adults don’t take the time to teach their kids to pay the credit card off in full each month . The idea is to show that you can live within your means. Not to spend more than you make and if you do it’s short term debt. Credit cards are not meant to be used as a way of supporting yourself, they are meant to get the credit status so you can buy a house, get a loan to open a business or to go to college.
The better your credit score is, the better the interest rate you will be able to get on a mortgage. Don’t jeopardize your future by being irresponsible with your credit cards.
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First Time Credit Cards For Teens
Every seventeen year old has a lot to look forward to when they turn eighteen, and one of those things is getting their first time credit cards. Of course, it is tough to get one since you need someone with good credit or something called a secure card. I took out a secure card from my local bank when I was eighteen.
A secure card is basically linked to a savings account. You can set a credit limit by depositing a certain amount into that account. Whatever you put into that account is your credit limit. I chose five hundred dollars since that is high enough to get my through a month, but not too much so that I won’t go crazy spending. It isn’t like a debit card where when you buy something, it takes out the money. The five hundred is never touched and treated like a security deposit in a sense. Once you end that credit card, you get the five hundred dollars back.
The secure card was great for me as I could use it for about one hundred dollars per month, and then pay the full monthly bill each month. This is building up my credit which I will soon need once I get out of college. The one thing I have been told by my parents, the bank, and others is that the best way to build the credit is to use the card, but then make sure you do not have any late payments and that you pay in full. I have followed that and should be getting my first credit score in a few months.
It should be high since I always paid my bill on time and in full. Another type of credit card is an authorized card from your parents that you can use. I don’t use this method but it is another method if you need to make larger purchases since they will likely have better credit and a higher limit. Of course, don’t buy things that you can’t afford. Bad credit card habits is what has turned America into being in debt, so don’t fall into that trap too.
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Comparing First Time Credit Cards
A credit card is plastic money in hand that gives us flexibility to buy anytime anywhere if it is accepted. It works on simple credit theory and we are given a buffer of few days to pay back the amount that is spent using credit cards.
There are many things to look before you apply for first time credit cards so that your credit card works exactly as per your expectations and knowledge. First thing to look for is annual fees. There are many credit cards these days that have no joining or annual fee. Some companies ask you to pay certain amount one time and get in return some gifts. Some charge annual fees and give you benefits like business lounge access, free club entry, more reward points on shopping, on certain petrol pumps, with certain air lines etc. It purely depends on individual requirements which one to choose. If one does not travel frequently and does not visit clubs, opting for a credit card with zero fees is the best choice. Always read the offer clearly. There shall not be any hidden cost. Credit card acceptance is also very important parameter.
Second thing to look for is credit period. Credit period is the buffer days during which you can pay back the amount spent without any interest. There are certain companies that have buffer days of even 52 days due to their statement cut-off dates. Choose the card that offers the optimum buffer period.
Third thing to look for is the interest that credit card company charges if your payment is not made by due date. Interest rate varies from company to company and choosing the lowest interest rate is always desirable.
Forth thing to look for is reward points structure. Some reward 2 points for certain amount of spending on card, some offer 4 points for same amount.
Last thing to look for is credit card limit, cash withdrawal limit and acceptance of all kinds of payment options. As per my personal experience, the best credit card is the one that is best for you. Always choose an optimum credit card that fits to be your personal best credit card. Be prepared before buying credit card first time
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- Why Care About First Time Credit Cards?
- First Time Credit Cards For Teens
- Comparing First Time Credit Cards
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- Students Applying For First Time Credit Cards
- First Time Credit Cards Used Wisely
- Advice For First Time Credit Cards
- Using First Time Credit Cards
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