Tips For Your First Credit Card

Getting your first credit card can be an exciting venture.  To some, it is a passage to adulthood.  You may notice that when you first arrive at college, credit card companies bombard you with offers by having booths all around campus and giving away free stuff.  All you have to do is apply and you get a bunch of free stuff.  It is important that when you apply you are applying for your first credit card, that you choose wisely and do not go crazy.  Because doing so, can potentially ruin your credit score before you even get your first credit card.  The following pointers are guidelines that you should follow when applying for your first credit card:

Applying for multiple credit cards

When you are trying to get your first credit card, you might have to do some shopping around before you are approved.  The key is to do all the shopping within 30 days.  The reason why is that whenever a credit issuer tries to issue you a new card, it checks your credit profile.  Checking your credit profile by a third party is what is called a hard inquiry.  Having hard inquiries on your credit report can be damaging to your credit score.  But if you do all your credit shopping in one month, it is only counted as one hard inquiry.  So if you apply for ten credit cards within a one month span, it is counted as one hard inquiry, and not ten.

Many cards have an introductory rate

A lot of cards will have an introductory rate, but pay attention to what the rate is after the introductory rate expires.  The introductory rate for students is often 9.99%.  After the introductory rate, it is normal for the APR to go above 24% for cards targetting college students.  So pay close attention to the terms.  The rates are in really big font so you won’t miss it if you glance over the terms and conditions of each card you apply for.

Retail cards

It’s usually a bad idea to apply for retail cards as your first credit card (ie Macy’s, Nordstrom’s, Home Depot, etc).  The problem with retail cards is that it doesn’t allow you to spend your credit anywhere else but the retail store that you got the card from.  So if you do not spend, you don’t really build up your credit as fast.  And if you spend, you are forced to spend on items that you may not even need.  Also, retail cards usually have a higher interest rate.