You’ve decided you are ready for a credit card. As a young consumer, this is an important step for your financial future. For those who are not new consumers but are ready for the next step after recovering from past credit problems, this can be an important step in your financial recovery.
Consumers who are obtaining a credit card for the first time and those who are applying for a credit card may find that the credit card application process contains one big “catch-22”. To get a low interest rate credit card, you need to have a good credit score. As a new or recovering consumer, you may have no credit or you may have bad credit. Many of you are forced to endure years of high interest rate cards or must apply for unsecured credit cards that have high processing and membership fees.
Take heart! Because credit card companies are always looking for new applicants, you may be in a better bargaining position than you previously thought. For those of you who are interested in obtaining your first credit card, weigh your offers and apply wisely. Most first-time applicants can easily obtain an unsecured credit card as long as they make their payments on time and pay at least the minimum balance. Once you are issued your first credit card, you will find that you may receive offers from other credit card companies that are looking for your business. The temptation to take advantage of online applications that offer an instant approval credit card should be tempered by your desire to maintain a good credit standing. Overusing and overextending your credit can be dangerous to your credit score.
For consumers who are recovering from a period of financial distress, obtaining a credit card is slightly more difficult but, by no means impossible. To avoid exorbitant fees, steer clear of those tempting offers for a bad credit credit card. Generally these cards charge as much as half of your credit limit just to obtain the card. Avoid cards with yearly fees, application fees and be sure to look for other hidden charges. For those of you with few options, obtaining an unsecured credit card may be impossible without a cosigner. As long as the card is relatively free of fees, a secured card may be the way to go. As long as you are sure to make at least the minimum payment each month, you will be able to rebuild your credit rating within a year or two and then apply for an unsecured credit card that meets your needs.
Young consumers and recovering consumers have special needs, but obtaining credit is not impossible. Be sure to look for the best credit card rate and offers that have reasonable or non existent fees for the best deal.
