Getting your first credit card

Since I have started writing about personal finance, a question I get asked a lot is: “I’m 18 and want to get a credit card. What can I get approved for?” Obtaining a credit card at an early age can be an excellent way to build a credit history that can make it easier (and less expensive) to finance a car or home later in life. Of course, getting a credit card before you understand how credit works can be disastrous. My first piece of advice to anybody thinking about their first credit card is to get it for the right reason. If you want a credit card because you’re thinking of all the things you could buy with the $500, $1,000, or $5,000 credit line it might give you. Stop!

The only reason you should get a credit card is to begin building your credit history. Only after you get used to making a few purchases with the card each month and paying them off immediately should you think about using the credit card regularly as a financial tool to make your monthly spending easier.

So, assuming you are prepared to get a credit card, what are your options?

Most major credit cards (American Express, Citi, etc) will not approve you without at least some good credit history, unless you are a full-time student.

If you are enrolled as a full-time student and over 18, you can apply for a student credit card and, as long as you do not have bad credit, will usually be accepted.

Student credit cards have small credit lines and higher interest rates, but these can be improved after some time of using the card responsibly.

Not a student? Your best bet is to walk into your local bank, whether it’s a small town savings bank, credit union, or even a branch of a large bank like Wells Fargo or Bank of America.

If you already have a checking account with them, ask them if they offer a credit card. Banks that have a relationship with you are more likely to issue you a credit card, even if you don’t have a credit history.

If you don’t have a checking account already, get one now, and then get a secured credit card.

What are secured cards? Basically they work like a pre-paid debit card, in which you deposit money and then draw on it with the card.

However, all pre-paid credit cards are not secured credit cards. The difference is secured credit cards you must recharge your account by the amount you charge each month. When you successfully do that, the card reports your activity to the credit bureaus so you successfully build your credit history.

If you want to start with a secured credit card, try the ONYX Card or NMB Secured Card.