How to compare and apply for your first credit card

How to compare and apply for your first credit card

If you've yet to acquire your first credit card, maybe it's time to think about getting one.

Credit cards aren't necessarily for everyone, but using a credit card responsibly is one of the best ways to strengthen your credit score. A few purchases even require the use of a credit card, such as booking a hotel room or hiring a car. While some establishments will take debit cards, others require that you use a credit card.

When you begin comparing credit cards, look for ones that offer perks like an introductory 0% purchase period. If you start out with the discipline of paying off your balance every month, you'll build your credit history, avoid paying interest and benefit from shopping conveniently and securely. And if you continue paying off your balance in full each month after the 0% interest period ends, you'll never pay interest charges but will still benefit from the perks.

Also consider cards with perks such as cash back on purchases. Again, these only benefit you if you pay off your balance each month otherwise interest charges will quickly dwarf any cashback you might earn.

But, be realistic.

If you believe that you will end up carrying a balance from month to month, start out by taking steps that will help keep you from falling into a downward spiral of debt. Find a card with a low interest rate, and get one with a low credit limit, to minimise your temptation to spend.

Another problem to be aware of is repeatedly applying for credit after being rejected. Should you apply for a card from a leading lender and be rejected, if you keep on applying to others, and keep on getting rejected, you will harm your credit history (if you have one) because it will look like you are desperate for credit. If this is the case for you, consider speaking with the bank where you have a current account to see what your chances are of successfully applying for a credit card from them. If you have a good history with your bank, your chances may be better.

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