Getting a credit card for the first time comes with a unique set of challenges. A lack of a credit history can make it harder to qualify, and you’ll have a learning curve when it comes to how to choose and use your first credit card. However, the actual process of applying for a credit card for the first time isn’t all that different from applying for a second or a tenth credit card.
Keep reading to learn how to get your first credit card.
Qualifying for a Credit Card
When someone applies for a credit card, the credit card issuer will take a number of factors into consideration, including their credit score and income, when deciding whether to approve their application. It’s also necessary to make sure you’re old enough to get a credit card — you usually must be at least 18 years old.
Someone’s credit score can indicate how likely they are to pay back their credit card on time. The higher someone’s score is, the more creditworthy they appear. Income is also a major factor that’s considered, especially when figuring out someone’s credit card limit. Applicants under the age of 21 who can’t show independent income generally must get a cosigner.
Additionally, those applying for a certain type of credit card, such as a student credit card, will have to make sure they meet that card’s particular requirements. While a student credit card may be available to those with no or limited credit, the cardholder generally must be enrolled in a qualifying program.
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How to Apply for a Credit Card With No Credit History
It can be difficult to qualify for a credit card before you’ve built a credit history, given what a credit card is. The catch? It takes credit to build credit. Thankfully, there are a few credit card options that consumers can consider if they don’t yet have a credit history.
Starter Credit Card
Starter credit cards are a type of credit card designed for consumers who have no credit history or a very limited credit history. Starter credit cards help cardholders build a credit history when they use the card responsibly. If they make on-time payments each month, they’ll see their credit score rise over time and will start to build a solid credit history.
Generally, starter credit cards don’t come with the best rates and terms, but when used to make purchases someone can afford to pay off each month, they can be a very helpful financial tool. Student credit cards are an example of starter cards that can help someone establish a credit history.
To apply for a starter credit card, you generally must provide the following:
• Social Security number
• Sources of income
• Monthly housing or rent costs
Those under the age of 21 who do not have your own source of income will need to get an adult cosigner who’s over the age of 21. For those who are applying for a student credit card as their choice of starter credit card, the credit card issuer may request information such as the name of your school or program, your major, and your expected year of graduation.
Secured Credit Card
Another credit card option for those who are new to credit is a secured credit card. With a secured credit card, the cardholder must deposit money to use the card.
The amount they deposit will act as their credit limit, and they’ll then borrow against that deposit. For example, if they deposit $500, they can make up to $500 worth of purchases anywhere that accepts credit card payments. Once they pay off their card balance, they can spend up to $500 again.
When at least the credit card minimum payments are made on time, the cardholder will build a credit history and improve their score. Functionally, a secured credit card works more similarly to a debit card but helps to build credit.
Applying for a secured credit card requires much of the same information as applying for an unsecured credit card. This includes your name, address, Social Security number, and income information. Additionally, it’s necessary to have the cash on hand to make the security deposit. Depending on the card, there may or may not be a credit check required.
How to Choose Your First Credit Card
When shopping around for a credit card, it’s a good idea to compare the fees, interest rates, and cardholder benefits of multiple credit cards. Here’s why these factors matter when choosing a first credit card:
• Credit card fees. From annual fees, to foreign transaction fees, to late fees, all credit cards have some fees that cardholders need to be aware of. Certain transactions, such as buying a money order with a credit card, can also involve fees. Being aware of the fees a card may charge and finding a credit card with low fees can help save money.
• Interest rates. If a cardholder carries a balance, they’ll need to make interest payments. Credit cards interest rates are displayed as annual percentage rates (APRs) and the higher someone’s APR is, the more they’ll pay in interest. What’s considered a good APR for a credit card will vary depending on someone’s credit profile as well as the type of card they’re applying for, but it’s generally below the average rate, which is around 16%.
• Rewards. From cash back to travel points to discounts at major retailers, credit cards can come with some pretty cool rewards. It’s worth comparing the rewards offerings of multiple credit cards to see where it’s possible to benefit more from good credit habits. Keep in mind, however, that the top rewards cards are usually reserved for those with solid credit histories.
How to Apply for a Credit Card
The process of figuring out how to apply for a credit card online for the first time is usually pretty straightforward. When it’s time to apply for a credit card, the applicant generally needs to supply the following information as a part of the credit card issuer’s application process:
• Identification (such as a Social Security number)
• Source of income (such as pay stubs or W-2s)
• Credit score (generally a score starting in the mid 600s is required)
Further information may also be requested, as the process can vary somewhat from issuer to issuer.
Once you’ve submitted your credit card application, you’ll wait to get an approval or a denial. It may take just minutes to get a response, or it may be a few days or even a few weeks. The creditor must send a decision within 30 days at the most.
If you’re approved, you’ll then receive your new card in the mail. You won’t have to worry about replacing it until your credit card expiration date, at which point the issuer will send you a new card.
How to Use Your First Credit Card
The key to using your first credit card is to limit charges to those that you can afford to pay off — and then making sure you do so in a timely manner. Doing so will ensure you never miss a payment, which will boost your credit score, and avoid late payment fees and interest payments.
Further, paying off your balance at the end of each month (or more often) will help keep credit utilization rate low. Credit utilization measures how much credit someone is using in comparison to how much they have available. The lower someone’s credit utilization, the more their credit score will benefit.
For instance, a potentially good way a student could use their first credit card is to limit their purchases to their textbooks for a semester. This will put guide rails on their spending as they learn to budget and stay on top of their credit card statements.
As someone adjusts to using a credit card, it’s also important to gain an awareness of credit card safety best practices. For instance, be on the lookout for credit card skimmers, which are devices attached to credit card readers designed to steal your information. Also be wary of sharing your credit card information, such as the CVV number on a credit card, with anyone.
What Should You Do if Your Application Is Denied?
If someone’s credit card application is denied, the best thing they can do to move forward is to work on improving their credit score. This will improve their creditworthiness, and thus their odds of getting approved in the future. Making on-time payments and keeping a low balance on an existing credit card are both ways to improve a credit score.
But if someone can’t qualify for any credit cards, how can they improve their credit score? In this scenario, one option is to become an authorized user on a family member’s credit card, such as a parent’s.
When someone is an authorized user, their score will improve as the main account holder makes on-time payments. However, both the account holder and authorized user’s credit scores are at risk if either party makes purchases they can’t afford, so it’s important that everyone has a plan for paying off the bill at the end of the month.
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Things You Need to Know as a First-Time Credit Card User
When someone is a first-time credit card user, it’s important that they understand the basics of how a credit card works. Specifically, they’ll need to know what interest rates and fees they may end up paying by using their credit card (especially if they plan to carry a balance).
Using a credit card can feel like shopping with free money, but at the end of the month, the cardholder needs to be prepared to pay their balance off in full. Otherwise, they risk paying more for the purchases they already made in the form of interest and fees. Once debt starts racking up, it can become hard to get rid of.
What If You Are Not Ready to Apply for a Credit Card?
Applying for a credit card for the first time is a big responsibility. If someone isn’t ready to take on the responsibility, they do have the option of using a debit card to gain some of the convenience that comes with a credit card.
A debit card is attached to a bank account and allows the account holder to make payments without keeping cash on hand. Debit cards don’t involve borrowing money, so interest rates aren’t a concern.
However, debit card holders will still need to look out for potential fees. Additionally, debit cards don’t have quite the level of protections that credit cards offer, such as the option to request a credit card chargeback.
Looking for a new credit card?
Getting your first credit card is a big step in the direction of financial independence. Much of the same information is required when it comes to how to get a credit card for the first time as is requested of any credit card applicant. However, first-time applicants will have to navigate the added challenge of having no or limited credit history.
Whether you’re choosing your first credit card or your fifth, it’s important to evaluate a number of factors to select the right card for you, including APR, fees, and rewards. For a limited time, new credit card holders† who also sign up for a SoFi Checking and Savings with direct deposit can start earning 3% cash back rewards on all eligible credit card purchases for 365 days*. Offer ends 12/31/23.
What is a good credit limit for a starter credit card?
The credit limit for a starter credit card is usually low. With a secured credit card, the limit is the amount of the security deposit that the cardholder makes.
What are the requirements to apply for a credit card?
To apply for a credit card, it’s usually required that the applicant provide proof of income and identifying information such as a Social Security number. They will also need to have an acceptable credit score to qualify.
Photo credit: iStock/Demkat
†SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS PROSPECTIVELY BASED ON MARKET CONDITIONS AND BORROWER ELIGIBILITY. Your eligibility for a SoFi Credit Card Account or a subsequently offered product or service is subject to the final determination by The Bank of Missouri (“TBOM”) (“Issuer”), as issuer, pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated. Please allow up to 30 days from the date of submission to process your application. The card offer referenced in this communication is only available to individuals who are at least 18 years of age (or of legal age in your state of residence), and who reside in the United States.
*You will need to maintain a qualifying Direct Deposit every month with SoFi Checking and Savings in order to continue to receive this promotional cash back rate. Qualifying Direct Deposits are defined as deposits from enrolled member’s employer, payroll, or benefits provider via ACH deposit. Deposits that are not from an employer (such as check deposits; P2P transfers such as from PayPal or Venmo, etc.; merchant transactions such as from PayPal, Stripe, Square, etc.; and bank ACH transfers not from employers) do not qualify for this promotion. A maximum of 36,000 rewards points can be earned from this limited-time offer. After the promotional period ends or once you have earned the maximum points offered by this promotion, your cash back earning rate will revert back to 2%. 36,000 rewards points are worth $360 when redeemed into SoFi Checking and Savings, SoFi Money, SoFi Invest, Crypto, SoFi Personal Loan, SoFi Private Student Loan or Student Loan Refinance and are worth $180 when redeemed as a SoFi Credit Card statement credit.
Promotion Period: The Program will be available from 10/1/22 12:01 AM ET to 12/31/23 11:59PM ET
Eligible Participants: All new members who apply and get approved for the SoFi Credit Card, open a SoFi Checking and Savings account, and set up Direct Deposit transactions (“Direct Deposit”) into their SoFi Checking and Savings account during the promotion period are eligible. All existing SoFi Credit Card members who set up Direct Deposit into a SoFi Checking & Savings account during the promotion period are eligible. All existing SoFi members who have already enrolled in Direct Deposit into a SoFi Checking & Savings account prior to the promotion period, and who apply and get approved for a SoFi Credit Card during the promotion period are eligible. Existing SoFi members who already have the SoFi Credit Card and previously set up Direct Deposit through SoFi Money or SoFi Checking & Savings are not eligible for this promotion.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
The SoFi Credit Card is issued by The Bank of Missouri (TBOM) (“Issuer”) pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
1See Rewards Details at SoFi.com/card/rewards.