How to get your first credit card
Consider the following when you are considering your first credit card.
Credit cards can be a great tool to help you manage your finances. There may also be some short-term benefits to borrowing and spending with credit cards. To avoid paying exorbitant fees, however, it is important to know how to use credit cards.
What are the benefits and drawbacks of credit cards
Credit cards can be a great option if you limit your spending to what you can repay. Here are some examples:
- Spreading the cost for goods over a time period
- Credit history building or credit improvement
- You can get money or air miles as a reward
- In the event that the merchant goes bankrupt, purchase item insurance
Credit cards have some drawbacks that you should consider
- It is easy to spend more than you have.
- Missed payments will negatively impact your credit score.
- It can be challenging to manage multiple credit cards.
What is the purpose of a credit-card?
Credit can be defined as money borrowed by way of a credit card, loan or overdraft.
The lender will conduct a credit check on you when you apply for credit cards. This is to determine your risk as a borrower.
If you are approved for credit, you will be granted a credit limit. If you are approved for a credit card, your credit limit will be a fixed amount that you can use to purchase goods and services.
Each month you repay the money borrowed, whether in full or in part, plus interest if any money is owed. Although there is a minimum amount that must be paid, it is better to make the full payment so you don’t pay interest.
Do you need a credit card to build credit?
You are unlikely to have credit history if this is your first credit card, or your first borrowing of money.
Banks and lenders will consider you a risky borrower. This is because there is no evidence to prove that you are a risky borrower. This can limit the number of credit cards that you are eligible for and the amount of credit that you can get.
You must use your first credit card correctly and on a consistent basis to build credit.
If you are looking to borrow more money for larger purchases, like a house or car, a better credit rating is a benefit.
Even if your credit history is poor, you still have options. If they learn how to apply for a credit card, UK borrowers will find it easy and stress-free.
These ideas and information can be helpful if you’re thinking of getting your first credit card. Find out how to apply for credit cards and what you should look out for when making your decision.
Who can apply for a credit-card?
To apply for a credit-card, you must be at minimum 18 years of age. Double-check your eligibility as some cards have a lower minimum age.
Many businesses won’t allow you to apply credit cards if your annual earnings exceed a certain amount, such as PS7500.
Borrowers should however be aware of another important step. To be accepted, borrowers in the United Kingdom may begin to prepare for their first credit card well in advance.
This is done to make sure you’re in the best financial position before applying for a credit card. This will increase your chances of getting approved for your first credit card application.
How to increase your acceptance chances
To increase your chances of getting a credit card, there are some simple steps you can take. These are the first steps to take before you look into getting a credit card.
You can improve your credit score by getting on the electoral rolls
Finding a job: Even if you only have a part-time income, it shows lenders that your ability to repay loans. If you’re not working, it could be a problem to get credit.
Open a bank account. Having a current account will increase your chances of getting accepted. To show lenders that your financial responsibility is evident, set up direct debits.
Pay your bills on-time: Lenders will accept proof that you have paid your bills on time for at most six months. This can convince lenders that you are trustworthy enough for them to lend you credit.
This guide will help you choose your first credit card
There are many types of credit cards. Each type of credit card is best suited for a specific type of borrowing. It is important to choose the right credit cards to meet your needs.
One option is to look for one that has a low interest rate in order to pay down existing debts. You might also want one that offers rewards specific to your lifestyle.
A credit builder card may be the best option for you if you’re a first-time borrower and need advice on how to obtain a credit card.
Credit cards to assist with credit growth
You will be approved for a credit-builder card if you apply for your first credit card.
This is a great first credit card in the United Kingdom. These cards are also great for those with poor credit and who want to improve their credit score.
Credit cards with credit builder cards have lower credit limits, ranging from PS100 up to PS250. These cards also have higher interest rates than usual, with rates ranging from 24% up to 50% and even higher.
You will build a reputation as a responsible borrower by returning your credit card regularly and using it on a regular basis. You may be eligible for another credit card if you have a good credit history.
How to get a non-credit-building credit card
The credit builder card is an important step in acquiring these cards. While you might not be able get all these benefits with your first card, you might be able over time to with a credit building card.
First, focus on how to get a credit card and then how to responsibly use it. You should then be able go to any of these types of cards:
Purchases at 0%: You will not be charged interest for purchases you make with your card for a certain period of time.
Balance transfers at 0% APR: You can transfer balances from another credit card that has an APR to avoid paying interest.
Money transfers at 0% Interest: You can transfer the majority of your card balances to your checking account. This service is normally subject to a charge.
Air miles: If you spend a certain amount with your credit card, you will receive air miles.
Benefits: Cashback is a benefit that allows you to get a portion of what you spend back. This could be as low as 0.5%.
Before you apply for your first credit card, here are some things to consider
It is important to keep these key points in mind when comparing credit card offers. These will help you choose the right card for you, and provide you with the best value.
The interest rate on your credit card shows how much money you have to borrow from the lender. Compare credit cards by looking for the “Representative APR.”
This rate is offered to customers with at least 51% who present the card. It is determined by your credit history and financial situation. This rate may not be the one you are offered. You may receive a rate higher than stated.
A few credit cards offer introductory interest rates that are lower than 0% for a limited time.
The standard variable rate will be applied to them. They are great for spreading the cost of products. However, you must pay your balance in full before the promotional rate expires.
Credit card limit
This is how much you can borrow using your credit card. Your credit score and financial situation will determine your credit limit, as well as your APR.
You may not receive a high limit as a first-time borrower. The lender might offer to increase your limit if you pay your bills on-time. You can request an increase if they refuse to offer.
It is important to be aware of any additional expenses. There are many options: late payment penalties, foreign transaction fees and cash withdrawal penalties.
How to manage your first credit card
Be sure to pay the entire balance every month before you apply for your credit card.
While you may not have to pay interest, you can still make use of the card’s many benefits such as improving your credit score.
Set up direct debit payments to pay the monthly amount. This eliminates the need for credit card debt to be paid manually and reduces the chance of missing payments.
How to apply for your first credit card
Online, phone, mail or in person, you can apply for the credit cards that interest you. To assess your chances of being accepted, you can use an eligibility checker to apply for a credit-card.
Online application is both the fastest and most efficient way to apply. You only need to fill out an application form online. If you do it this manner, you might be accepted within minutes.
The following information is required by most credit card companies:
- Name and postal address
- The date of your birth
- Salary and employment situation
You should not apply for more than one card. Reapplying within six months will result in rejection by most providers.
Here are some tips to help you get your next loan application approved. If you have a good credit record, apply when it is convenient, and maintain a clean financial picture, you will be more attractive to potential borrowers.
While you have the right to inquire about why your application was denied, the lender is not obliged to answer.
Alternatives to credit cards
There are many options available to you if your application is denied or you do not want to be approved for a credit card.
- Debit Card
- How to get a prepaid debit card
- You can make use of your overdraft facility, but be aware of any fees
- Applying for a short-term loan