subject: Get Your First Credit Card [print this page] Get Your First Credit Card Get Your First Credit Card
These days, receiving a credit card is considered a financial rite of passage. Most of us know that receiving a credit card is important; the way you use credit sets the foundation for your credit rating for the rest of your life. Understand, though, that turning 18 does not mean that you are ready for a credit card. New credit rules in the U.S. insist that you get a co-signer if you are under 21 and don't have job that allows you to pay back the loan. Even if you are older than 21, you might not be prepared for a credit card. Before getting a credit card, it is vital that you honestly evaluate your finances, and your habits. You should know that you are ready for your first credit card.
Credit Card Problems
One of the biggest pitfalls of getting your first credit card before you are disciplined enough financially is that you are likely to find yourself in large amounts of debt. Using a credit card can be a heady feeling. You believe you can buy nearly anything. The minimum payments on credit cards are so low that you might actually believe that you can afford to purchase an item you would never buy if you had to pay from your checking account.
Since many people get their first credit cards as students, and youth is often associated with impulsive behavior, it isn't really a surprise to onlookers when impulse buys multiple and debt mounts. For some young people, receiving a credit card too early leads to a cycle of debt. No matter if you have the best credit card offer imaginable, you could find yourself saddled with too much credit card debt. In order to avoid this fate, you need make sure you are truly ready for a credit card.
How to Tell If You're Ready for a Credit Card
Financial discipline is the most important factor when deciding whether or not to get your first credit card. It is vital that you show a certain level of maturity, indicating that you can manage your money prudently. Before applying for a credit card, it is important to develop good financial habits. Some of these good habits include knowing how to budget, learning how to rein in your spending, and only buying things you have money for. You should also understand that a credit card is a type of loan that you have to pay back with interest. Borrowing as little as possible is important, and until you have an understanding of debt and how to avoid it, you are not ready for a credit card.
If you can control your spending, and if you keep track of your expenses and stick with your budget, you are indicating that you should be ready for your first credit card. Once you have your card, though, you need to continue your good habits. In order to avoid credit pitfalls, you need to pay off your balance each month, and control your spending so that you don't charge more on your card than you can pay off. A good idea is to begin with a student credit card or a card with a low limit.
Before you fill out an application for your first card, practice a little with following a budget. Applications on the web can help you learn about budgeting and help you track your spending. Until you are comfortable with money management, you will not use credit cards wisely.
