How to Get a Credit Card

Basic details on credit cards


Before thinking of how to get a credit card, you should be aware of the basic anatomy of the problem. Credit cards are borrowed money, made available to you under the form of a plastic card. They are associated with a credit line opened at a financial institution, supermarket or any other credit card issuer. Like any other form of loans, credit cards come with both benefits and disadvantages.

Cardholders find it easier to shop with credit cards, as these replace cash. Because of this, you can make purchases online, via phone or e-mail, without having to actually be there for the transaction. Those who own credit cards can also make large purchases and pay for the goods or services in small installments, over a certain period of time.

On the other hand, those who get a credit card can easily fall prey to compulsive buying. Because they cannot see the cash, they live under the impression that the money they spend on their purchases is not real and that they are not supposed to return them. Many credit cards have high interest rates and fees. In addition, having a credit card does not keep your finances safe from fraud attempts.

Age limits for credit card cardholders


Starting February 2009, all applicants who are not of age can get a credit card only if a tutor or parent co-signs for them or if they make proof of sufficient income. Many parents agree to co-sign for their child’s credit card hoping that he or she will learn about financial responsibility. Unfortunately, experts consider that the only ones believing in this “myth” are the parents. Reality proves otherwise. Most teenagers who get a credit card thanks to their parents or tutors tend to spend more than they can afford and they are already in deep debt long before they go to university.

Tips on how to get a credit card for the first time


When you want to get a credit card without being aware of the underlying mechanisms of credit, it can be extremely costly. It always helps to know the basics of the system you are getting yourself into, as well as the rights and obligations derived from the contract you are going to sign. Here are some things you should consider when you want to get a credit card for the first time:

  • Choose an appropriate credit card. If you are a student, there are offers of credit cards for students you can choose from. On the other hand, even if your credit card is approved easily, do not get more than one credit card, as credit card issuers are famous for preying on inexperienced clients. Learn the ropes of handling credit, regardless of the potential great offers you get. Some credit cards for students are not advantageous, as they come with very high interest rates or other unacceptable conditions. Learn to compare the offers before making your decision and, if you feel you lack the knowledge, ask for somebody else’s advice (preferably your parents or somebody who has experience in dealing with credit cards and managed to keep a good credit history).
  • Apply for only one credit card. All your inquiries are reflected in your credit report and make up 10% of your score. If you face many rejections from credit card issuers, it will affect your credit score and businesses requiring your credit report will base their decisions on the numbers there. FCRA or the Fair Credit Reporting Act regulates the conditions in which business can check your credit report. These situations are:
    • when they plan to give you credit;
    • when they want to collect a debt;
    • when they plan to hire you;
    • when they have to issue a license for you;
    • when they plan to make certain business deals with you;
    • when they underwrite insurance.
  • Any credit card issuer should be concerned with your credit history. When you have no such history, they will discuss with you the options you have for getting a credit line approved. If the company does not seem interested in your credit history and never brings up the subject, it is most likely a fraud and, regardless of how advantageous their offer might be, there is a high chance that you will lose a lot of money.

What to avoid when you get a credit card

You should check many details related to the credit card before signing the contract, but first of all you have to consider the price of money. The price of money takes many forms when it comes to credit cards:

  • The interest rate for the credit card is the main source of revenue for credit card companies and one of the most important criteria clients must consider. Different credit cards have different rates and, naturally, you should choose the one with the lowest interest rate. This rate varies between 6% and 36% and depends on the risk you pose for the issuer, as well as on the type of credit card you choose and the size of your loan.
  • Look for the lowest annual percentage rate or APR. Sometimes, the price of money translates into an annual rate, rather than in monthly rates. Naturally, the lowest value is the most advantageous for you.
  • There is also an annual fee the issuer could charge simply for allowing you to open a credit line at their company. Not all issuers impose this fee so the most convenient for you is to search for a credit card that has no annual fee.
  • If you know you will make many balance transfers, then investigate whether the credit card that caught your attention has balance transfers fees.

Keep in mind that one of the reasons why you want to get a credit card is to establish good credit history. Not all credit card issuers report your status to credit bureaus. There is not much to gain for you if you collaborate with such issuer.

The regulations regarding credit cards

The bill approved by the U.S. Senate in 2009 changed the way consumers used to get a credit card and manage the obligations derived from this action. Some of the clauses of this bill are meant to protect the consumer from credit card issuers’ abuses. For instance, being late with your payments on one credit card would not affect the interest rate of any other credit card you might have. Secondly, the credit rates could not be raised unless the payments are 60 days past due. In addition, if you pay your rates on time for at least 6 months in a row, these rates would be lowered back to their initial amount. Before you get a credit card, you need to go thoroughly over all the regulations, in order to be aware of the obligations and rights you have when you sign the contract.