Top Things To Know Before You Get Your First Credit Card

It’s a very exciting time in your life when you are working to get a credit card for the first time. Having a credit card may feel like you’ve become an adult and provide you financial freedom. But make sure you take this responsibility seriously and avoid accumulating debt. Your first credit card is the beginning of establishing your credit history and score. 

We’ve put together a list of tips so you can build your credit responsibly by using your first credit card.

Here’s What You Need to Know About First Time Credit Cards…

Learn About Credit

Since you are embarking on a life long financial journey, it is wise to know what builds your credit. Your behavior as it relates to money will contribute to what banks and lenders call “creditworthiness”. This means how much risk it is for a lender to extend you credit or a loan.  many things you do financially will be recorded in your credit report by the three big credit agencies, Equifax, Experian, and Transunion. The data on these credit reports is then calculated into your credit score. This number is then used by lenders and determines which loans you will be approved for and what fees and interest rates you will pay. It is well worth it to understand what factors will shape your credit. 

Young man checking his credit score online

Check Your Credit Score

Once you understand credit, it’s time to know where your score stands. If you are just starting out, you may not have a score yet. But your credit builds quickly. Once you begin using credit cards or other loans, your credit history begins. It is wise to stay on top of what appears in your credit reports and correct any errors. 

Each year, you can get your credit report from each of the three major credit-reporting bureaus — Experian, Equifax, and TransUnion. To get your score, you can pay a fee to a credit score service. A good score generally is above 700.

Know Your Options For Your First Credit Card

If you’re having trouble getting approved for your first credit card, there are options. 

  • A student credit card, or a credit card designed for college students.
  • A secured credit card, or a card that requires a cash deposit.
  • A “fair credit” credit card, a card offered to those with a fair credit score
  • A credit card you pre-qualify for, such as through your bank
  • A co-signed credit card, trust an established borrower with good credit to co-sign with you or become an authorized user on their credit card
Person filing out a credit card application

Don’t Go Crazy Applying For Many Credit Cards

While you may be tempted to apply for numerous first time cards, remember that every time you apply for a credit card, it lowers your credit score a bit. It’s better if you do your homework to find the right card to apply for.  If you’d like to apply to more cards, keep in mind that it is best to spread out requests at least six months apart.

Read the Fine Print

Prior to applying, credit card issuers are required to disclose their terms including interest rates and fees. Make sure you understand the following terms credit card terms:

  • APR, or annual percentage rates.
    Annual Percentage rate is the interest rate you’ll be responsible for paying each month. Note that some credit cards charge different rates for different things like purchases, balance transfers (debts moved from one card to another card) and cash advances (cash withdrawn from the credit card). 
  • Late fees.
    A late fee is money charged to you if you pay late or if you don’t pay at least the minimum amount due. (They can be quite substantial so make sure you pay on time!)
  • Penalty APRs.
    Credit cards will charge a super high APR to future and existing balances- some as high as close to 30%- if you are significantly behind on payments. Penalty APRs are more uncommon, can make it very hard to pay off your debt with interest accumulating that high.
Man reading the fine print on his first credit card

Be Prepared for Credit Card Payments

Know that a credit card is a responsibility. You will be required to pay all the money you borrow. It’s extremely important to make sure you review your credit card statements each month. Know what your minimum payment due is and the due date. Remember it is wise to pay more than the minimum to avoid debt. 

TIP: Consider setting up reminders or automatic payments to your credit cards to avoid missing a payment.  (A Google Calendar reminder works great for this!)

Don’t Ruin Your Credit

A credit card is a great way to build credit but make sure you are smart about it. Don’t miss a payment. If you do, you may risk ruining your credit:

  • Late fees. The legal limits on these fees are adjusted annually. But generally, the first time costs well over $20, and subsequent violations can be close to $40.
  • Penalty APRs. While many credit cards don’t charge penalty APRs, you should be aware that some still do. A penalty APR begins when you pay late, and can increase your interest rate at an alarming rate. 
  • Damage to your credit. If your payment is more than 30 days late, this will be added to your credit reports and lower your credit score.

Another potential way that using a credit card can ruin your credit is that you over-use your cards. There is something called a credit utilization ratio. This is how much you have borrowed against the available credit. Credit utilization is a large influencer to your credit score. If this gets too high, your credit will suffer. 

TIP: Use 30% or less of your available credit at all times to keep your credit score up. 


Getting a credit card for the first time is a milestone in your life. It is also a huge responsibility. Take the time to educate yourself on the options and plan ahead to avoid debt and to build your credit. If you methodically choose a good option for you and then make on-time, regular payments, you’ll benefit from the convenience that a credit card provides as well as establishing great credit health.