Tuesday, September 27, 2022

What Credit Card For First Time

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What You Willand Wontbe Asked On A Credit Card Application

The best first time credit cards for UK beginners in 2022

U.S. consumers submit about 170 million credit card applications annually.

This article is reprinted by permission from NerdWallet.

Applying for a credit card is usually pretty easy. But it helps to be aware of what information you need to provide. That way, youll know what to expect and can quickly learn whether youre approved.

If youll be applying soon, youll have plenty of company. U.S. consumers submitted 140 million credit card applications in the lighter-than-usual pandemic year of 2020 and about 170 million in a normal year, according to a credit card market report by the Consumer Financial Protection Bureau.

What questions will I be asked on the application?

Youll have to supply a lot of personal information, so be prepared for that.

Why? The card issuer will typically use the information to decide whether it will approve you for a credit card. The most obvious step with most credit cards is a credit check, usually with one of the three major credit bureaus. After all, the credit card company is extending you credit. Its trusting you to pay for everything you charge to the card. In that way, its like applying for a loan.

The exact information can differ among credit card issuers, but generally, heres what youll have to supply:

Social Security number

Its safe to supply these numbers if youre dealing directly with the issuer. Legitimate card-comparison websites will direct you to the issuers site to fill out the application.

Income

Date of birth

Which Cards Are Best

While there is no one first time credit card thatâs best for everyone, here are a few cards with the most competitive offers for first-time applicants:

Capital One Journey® Student Rewards. This card is offered to full time college students and offers great rewards on each qualifying purchase. This rewards card offers you 1% cash back on all purchases, and 1.25% when you make your payments on time. It has no annual fee and no foreign transaction fees.

Capital One Secured Mastercard. This card requires a minimum security deposit of just $49, but will give you a credit line of $200, and access to a higher line of credit after making your first five monthly payments on-time. Thereâs no annual fee and no foreign transaction fees.

Discover Student Chrome. This card can earn you 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, and unlimited 1% cash back on all other purchases. It also offers you a $20 statement credit each school year that your GPA is 3.0 or higher, for up to five years. It has no annual fee and no foreign transaction fees, and Discover will automatically waive your first late payment fee.

BankAmericard for Students from Bank of America. This is a simple credit card that offers no reward points, but has 15 months of 0% APR financing on new purchases, and no annual fee.

Research the credit terms for each card to find one that best suits your financial habits.

Chase Freedom Unlimited: Best For Future Value

Sign-up bonus: Earn an additional 1.5% cash back on everything you buy worth up to $300 cash back.

Annual fee: $0.

Rewards: Earn 5% back on travel booked through Ultimate Rewards, 3% back on dining and drug stores and unlimited 1.5% cash back on all other purchases.

Why its a great first credit card: The Chase Freedom Unlimited is a great starter card because its buildable. When you have this card by itself, youre earning at least 1.5% cash back on all purchases. However, as you get more comfortable with credit card rewards, this is an easy card to pair with other Chase cards to round out a complete credit card strategy.

When you combine this with the Chase Sapphire Preferred,Chase Sapphire Reserve or the Ink Business Preferred Credit Card, you can merge the rewards you earn on the Freedom Unlimited with your other point balances to effectively convert your cash-back earnings into full-on Chase Ultimate Rewards points which means you can transfer the points you earn on it to one of Chases 11 airline or three hotel partners or redeem them for added value directly in the Ultimate Rewards travel portal. Ultimate Rewards points are some of the most valuable points for travel redemptions, and who doesnt love free travel?

Read our full Chase Freedom Unlimited review for more details.

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Official application link: Chase Freedom Unlimited.

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Capital One Ventureone Rewards Credit Card: Best For Flexibility

Sign-up bonus: 20,000 miles after spending $500 on purchases in the first three months of account opening.

Annual fee: $0.

Rewards: Earn 1.25 miles per dollar on all purchases.

Why its a great first credit card: When youre first starting in the credit card rewards game, juggling different bonus categories and trying to figure out the best redemption options can be confusing and time-consuming. The Capital One VentureOne makes earning travel rewards much simpler. Youre always getting at least 1.25 Venture miles per dollar on every single purchase, and the redemption process for those miles is super simple.

You can redeem them at a fixed value to cover travel purchases on your statement, which means you know youre getting 1 cent per mile out of your rewards. This means the sign-up bonus is worth at least $200. However, as you get more advanced with travel and award charts, Capital One also lets you transfer your miles to 15-plus airline and hotel partners, where you could potentially get even more value. In fact, TPGs valuations peg Capital One miles at 1.85 cents apiece when used in this way, boosting the value of the VentureOne bonus to $370.

Read our full Capital One VentureOne review for more details.

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Best Unsecured Credit Cards For Building Credit

Basic Credit Card Usage Tips For First Time Credit Cardholders

An unsecured credit card doesnt require a deposit for approval. Some cards may charge an annual fee once you activate your account, but you wont need collateral or a security deposit for your new credit card.

Some unsecured credit cards for new credit users will start out with a lower credit limit until the cardholder can prove he or she can responsibly manage credit. Many banks especially Capital One will provide frequent credit line increases if you keep your balance low and consistently make on-time payments.

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The Surge Mastercard® potentially offers one of the highest unsecured credit limits on this list, but it also comes with a higher interest rate that can quickly add to your debt if you dont pay your balance in full each month.

You can also attempt to prequalify for this card through the issuers website on the apply now link. The prequalifying form will not impact your credit score and can give you a better idea of your approval chances before you officially apply for the card.

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Capital One Savorone Cash Rewards Credit Card: Best For Entertainment

Sign-up bonus: Earn $200 after you spend $500 on purchases in the first three months of account opening.

Annual fee: $0.

Rewards: Earn 3% cash back on dining and entertainment 3% cash back at grocery stores 3% cash back on popular streaming streaming services 1% on all other purchases.

Why its a great first credit card: The Capital One SavorOne is one of the most rewarding no-annual-fee cash back cards. Youre getting an excellent 3% on dining and entertainment two vast and common bonus categories on top of 3% back at grocery stores and on popular streaming services. In addition, you wont pay foreign transaction fees when traveling outside the U.S.

Capital One also has the Capital One Savor Cash Rewards Credit Card, which comes with 4% cash back on dining, entertainment and popular streaming services, and 3% cash back at grocery stores in exchange for a $95 annual fee.

The information for the Capital One Savor card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

However, for those who are brand new to the credit card market, the SavorOne is easier to be approved for and provides a lot of value without charging an annual fee.

Read our full Capital One SavorOne Card review for more details.

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What Are The Benefits Of Building Credit

Nearly every facet of your financial life is impacted by the strength of your credit score. Building a good credit score helps improve your approval odds for financial products, helps you qualify for lower interest rates and better terms and allows you to to benefit from robust credit card benefits.

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Cash Back Credit Card

Does the thought of getting rewards for buying salsa dancing lessons or your daily latte excite you? If so, a cash back credit card could be the best first credit card for you. these credit cards deliver cash back rewards when you use them to make everyday purchases. The Discover it® Cash Back Credit Card may be a great choice for a first credit card because it offers benefits like 5% cash back on purchases in categories that rotate every quarter up to the quarterly maximum when you activate, 1% automatic cash back on other purchases, and an automatic dollar-for-dollar match on all the cash back youve earned at the end of your first year using the card1.

Research The Available Options

How do I get a credit card for the first time?

When youre just beginning to build your credit, look into cards requiring little or no credit history. The best first credit card for you may be a secured credit card or student credit card.

With typical secured credit cards, your credit line will equal the amount of the required cash deposit after you are approved. The difference between this and a debit card is that your on-time payments help build credit with responsible use as your activity is reported by the issuer to credit bureaus.

Also consider a student credit card with a low annual percentage rate and a rewards program rewarding purchase categories youll most often use.

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How Credit Cards Work

Redeem your points and miles to book a trip to the Conrad Bora Bora.

Travel credit cards can help you earn points and miles. In other words, these pieces of plastic are putting you one step closer to a free trip to your dream destination, wherever that might be.

There are many ways to pick up points and miles, from flying on airlines or staying at hotels to online shopping portals when making online purchases. However, the biggest and the best way is through sign-up bonuses and welcome offers. This is a fancy way of saying, if you spend a certain amount of money in a certain amount of time, youll earn a certain amount of points.

Related: 3 mistakes people make when they get their first credit card

It varies from card to card, which well break down shortly. Nothing happens if you dont hit the minimum spending requirements to earn the bonus youll just miss out on a big haul of points or miles. You will, though, get points for whatever spending you do put on it. Again, this varies from card to card.

A lot of credit cards will also offer bonus points for spending on certain categories of purchases. For example, if you get 3 points per dollar on dining and your dinner costs $15, youd earn 45 points. Those 45 points wont get you anywhere by themselves, but they do add up over time.

Of course, points and miles arent the only reason why having credit cards is important for your overall financial health. They also help you build credit.

Capital One Platinum Card

If you have average credit and want to learn good credit habits without worrying about rewards, consider the Capital One Platinum Credit Card.

This card will likely start you out with a low credit limit, but Capital One says it will consider boosting your limit after you make six on-time payments on your card. This card also comes with no annual fee.

Read more about the Capital One Platinum card:

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Understand Credit Card Basics

A credit card allows you to borrow money for purchases. The bank gives you a , which is the maximum amount the lender will allow you to spend on your card. If you pay your balance in full each month, theres often no cost to you for using the card. If you carry a balance from month to month, youll pay interest. The interest rate, expressed as , depends on your credit history and the type of card.

Simple Steps Can Lead To A Bright Financial Future

Pin on Adulting

. And having good credit can make it easier to rent an apartment, take out a car loan and buy a home, among other things. But it can be hard to know how to establish credit for the first time.

You might have no credit history, otherwise known as âcredit invisibility.â Or you might have thin credit, which means you donât have enough credit history to be scored. Whatever the case, there are several ways to establish credit. The general idea behind each strategy involves building a solid history over time with responsible credit use.

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What Is The Best First Credit Card For Students

The Journey Student Rewards from Capital One proves that Capital One is not only one of the best consumer credit card issuers, but its also a top choice for students and those who are just starting out in the credit world.

This card does away with most of the pesky fees you see associated with other credit cards for fair credit or for students and replaces those charges with a flat cash back rewards rate that pays you.

Discover It Student Cash Back Card

Students who like to maximize rewards should consider the Discover it® Student Cash Back, which is typically available to consumers who don’t have an extensive credit history.

Once you’re approved, you can enroll to earn 5% cash back up to a quarterly maximum limit spent on purchases in categories that rotate each quarter, plus 1% back on everything else . Like other cash-back credit cards from Discover, this card will also match all the rewards you earn at the end of the first account year.

If you’re a student with little or no credit history, be sure to read our guide to the best credit cards for students and find out how to boost your credit score by having a parent add you as an authorized user to their credit card.

This card also lets you see your credit score for free each month, and you’ll get Social Security Number monitoring, zero fraud liability, and no late fee on your first late payment. Consider signing up if you want to earn rewards and build credit at the same time without an annual fee.

Read more about the Discover it Student Cash Back card:

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Why You Can Trust Bankrate

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here’s an explanation for how we make money. The content on this page is accurate as of the posting date however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the authors alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

Prove You Can Make Credit Card Payments

First-Time Credit Cards: Your questions answered

To get approved for a credit card, youll need to report income to show your ability to make payments. Credit card companies may also ask for the amount you pay for housing each month as part of the application.

If you are a student, you may also need to provide information such as your college or universitys name, state and city and proof that you are currently enrolled.

If youre under 21 and can show you have enough independent income, you may be able to get a student credit card on your own.

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First Progress Platinum Select Mastercard Secured Credit Card

  • Receive Your Card More Quickly with New Expedited Processing Option
  • No Credit History or Minimum Credit Score Required for Approval
  • Quick and Complete Online Application No credit inquiry required!
  • Includes Free Real-Time Access to Your Credit Score and Ongoing Credit Monitoring powered by Experian
  • Full-Feature Platinum Mastercard® Secured Credit Card Try our new Mobile App for Android users!
  • Good for Car Rental, Hotels Anywhere Credit Cards Are Accepted!
  • Monthly Reporting to all 3 Major Credit Bureaus to Establish Credit History
  • Just Pay Off Your Balance and Receive Your Deposit Back at Any Time
  • 24/7 Online Access to Your Account
  • Nationwide program available in all 50 US states *See Card Terms.
  • Get a fresh start! A discharged bankruptcy still in your credit bureau file will not cause you to be declined.
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Understanding Apr And Interest

If you pay off your credit card every month, you dont have to worry about interest charges piling up. However, sometimes things happen and you end up carrying a balance on your card at least for a few months. In those cases, its important to understand what your APR is and how much interest youll be charged on your card.

When you carry a balance, your credit card issuer will charge you a percentage of that each month until you pay off your card. The amount of interest you are charged is based on a credit cards annual percentage rate .

Typically speaking, a card will advertise a variable APR rate that is listed as a range. Variable means that your rate can change over time based on an index interest rate such as the prime lending rate thats determined by the Federal Reserve Board . The better your credit score, the lower your APR on your credit card will likely be.

However, if you follow our advice and pay your balance in full and on time every month, the APR on your card will never come into play.

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