How to Get a Credit Card for the First Time

Posted by Excite Credit Union on May 3, 2022 9:51:57 AM

A young woman and first-time credit cardholder makes a purchase on her laptop while holding her credit card.

Of the many financial milestones that you will reach in your lifetime is opening your first credit card. The establishment of credit will set the foundation for the rest of the financial moves you make throughout your life — from financing a vehicle to buying a house.

Keep reading to learn more about how to get first-time credit card approval, how credit cards help you establish a credit history, and what to look for in a credit card.

The Importance of Credit

When you are first establishing your credit and developing a credit score, you may not have any financial history for creditors and potential lenders to review. This is why opening your first credit card is so important. Without building your credit history, you will have a difficult time applying for any type of financing in the future.

Understanding your credit score and knowing what is on your credit report is essential. Financial institutions check your credit report and credit score before approving you for any type of financing. Review your free credit reports annually from the three credit bureaus to ensure that you are successfully building up your credit, and to check for any errors.

Each month, financial institutions report on their customers’ accounts, reflecting their ability to either make payments on time or slip up with a late payment. Over time, a consistent habit of keeping up with all monthly payments will begin to establish a solid credit history and a good credit score.

Most lenders like to see a credit score of at least 620, with the best rates and the best chances of loan approval going to consumers with a credit score of 700 and above.

Alternatives to Establishing Credit

If you do not have any credit history and are seeking your first credit card, you have not run out of options. Thankfully, there are a variety of ways to seek alternatives to credit — at least, temporarily.

Secured credit cards are one such option. With a secured credit card, you will put down a small cash deposit that will be held by the financial institution until you either close the card or convert it to an unsecured line of credit. 

This deposit ensures that if you default on your account, the bank has a way to recover the money. In the meantime, you are building up your credit history with a year or two of on-time payments that will start you off with a firm foundation of creditworthiness.

You can also become an authorized user on another individual’s account to benefit from their favorable credit history and on-time payments.

Age Requirements

Most credit cards, even student credit cards, have a minimum age requirement unless you are applying for a card with a parent or guardian. Generally, you must be 18 years old to obtain your first credit card. Authorized users can be as young as 13 when added to the account of a parent or guardian.

Even applicants who meet the minimum age requirements may still have to go through a stricter verification process to show they can keep up with the payments on a line of credit, especially when there is not yet an established credit history.

What to Look for in Your First Credit Card

So, what should you look for when getting a credit card for the first time? You’ll want to look for a credit card that offers good perks and rewards, low-interest rates, and minimal fees. 

Typically, a student card or credit-builder card will be the smartest choice for opening your first credit card. These cards are marketed toward first-time applicants who have yet to build or establish any credit. They typically have lenient requirements to accommodate those with little to no credit history or give applicants the option to benefit from a secured credit card.

As the lender begins to report to the credit bureaus each month, you will begin to build up your credit report. This information will stay with you for many years to come, so be sure to avoid late payments at all costs, especially during this crucial time period.

Banks vs. Credit Unions

Which is better — banks or credit unions? Compared to banks, which rely heavily on algorithms to score your application, credit unions have a more personalized underwriting process in which each candidate’s financial situation is evaluated, and applicants are considered for their individual creditworthiness.

This means that many consumers who would otherwise not be able to qualify for a loan or credit card will be more likely to obtain services from a small local credit union than from a large national bank.

First-Time Credit Card With Excite

At Excite Credit Union, you become part of a cooperative where members benefit from one another, and our not-for-profit operation is run by local management that really cares about you. Member benefits include high rates on deposit accounts, low rates on loans, friendly service, and a variety of tools and resources to help you improve your financial education.

We are here to help you establish your credit history with your first credit card. Score free travel services, earn cash back, or build credit with one of our credit card products. Learn more about our credit cards today!



Topics: Credit Cards