It is important to weigh the advantages and disadvantages when choosing a credit card for your first time. There are many factors you need to take into consideration, including the annual fee as well as credit limit, cosigner option and credit limit. Your individual situation and goals will determine which option is best for you.
Annual fees that are very low or zero
Applying for a no-fee credit card is a great way to start building your credit history, even if you have less-than-perfect credit. No-fee card are great for those with little credit history, or who just started building their credit. They can help you establish a credit profile that will be able to allow you to apply for a better car or mortgage.
Many starter credit cards are free of annual fees and easy to obtain. These cards may offer better rewards and perks depending upon the terms and condition of the card. While some cards have no annual fees, others may charge a higher interest rate.
To determine whether you are eligible for a no-fee credit line, your credit report must be checked before you apply for your first card. The information in your credit report will include details about your credit history as well as any student loans. This information is used to determine your credit score, which is a number that will be used by financial institutions when making loan decisions.
Low credit limit
Commonly, a credit limit of less than 500 dollars is offered to first-time applicants for credit cards. Many factors can influence this. Your age, income and credit score all determine the credit limit you will receive. Most people will only be approved for a credit card once they have applied. This is usually between $500 and $1,000. Your credit score may allow you to apply for higher limits.
It is important that you understand that credit limits are not equal for all people and that they will increase over time. Because it can have adverse effects, it is important to keep within your credit limit. There are several strategies that you can use in order to increase the limit of your first credit line.
Before you apply for a credit card, first make sure to check your credit score. A high credit score indicates that you are trusted by the issuers and can increase your limit. A second thing to do is make sure you pay your balances on the due date. You can apply for a different card if you're unable to pay your bills in time.
Option to co-signer
Even though you might be tempted to apply for a jointly-issued credit card through a family member or friend, there are serious risks involved in cosigning with a shared account. For one thing, a joint account has a low credit limit and some banks do not report activity. If the cardholder defaults on payments, the cosigner will be responsible and can see the cardholder’s statement. Late payments can hurt the co-signer's credit.
If you are applying for your first credit card you need to ensure that your friend or relative is financially stable. You may not be approved for a credit card if your credit score is poor. But if you have someone with good credit and who is responsible, it will help you get approved.