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When should I get my first credit card?

If you want to start building a credit history, it might be time for a card.

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Just like moving out of home or getting your first car, applying for a credit card is a rite of passage into adulthood. In fact, more than 75% of all Americans have at least one credit card according to the New York Federal Reserve Household Debt Report, Q2 2018.

Before you apply for your first card, consider several factors, including the age requirements, different reasons you might want a credit card, questions to help you find out if you’re ready for a credit card and how to improve your chances of approval when you apply.

Our pick for a first credit card

Deserve® Edu Card

  • Amazon Prime Student on us for a year (Lifetime Value worth $59)
  • 1% cash back on all purchases
  • Cellphone protection
  • Mastercard Platinum benefits
  • $0 annual fee
  • No international transaction fees
  • 20.24% variable APR (Prime + 15.49%)
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When should I get a credit card?

Here are a few factors to consider before applying for a credit card. In many cases, they’re more important than your age.

  • Do I make enough money?
    Credit card issuers don’t have specific credit card application income requirements, but they want to make sure you can afford to pay off your debt. This is also one of the main factors determining the amount of the credit line you can get.
  • Do I have a good credit history?
    Do you have unpaid loans or fines, or is your credit history a clean slate? You can request a free copy of your credit report from each of the major bureaus once a year. Before you apply, check these details and decide if your financial history supports you.
  • Do I have a budget?
    In addition to interest costs if you carry a balance, some credit cards charge an annual fee. Consider how much you could afford to pay in account fees so you can decide if it’s worth it at this stage of your life. If you are working with a budget, you might consider a cheaper credit card.
  • Can I control my spending?
    Similar to budgeting for credit card costs, think about how much you’re likely to use the card. Can you stick to costs that you’re able to pay back each month? If you’re unsure but still want to apply, you could also consider a secured card to help keep your spending in check.
  • Do I have the knowledge to make good financial decisions?
    Having solid financial knowledge — such as how to save and how to properly use a credit card — is more important than how old you are. Understanding the mechanics of credit cards will help you be a responsible cardholder.

At what age can I apply for a credit card?

The minimum age you can apply for a credit card is 18, although you can be added as an authorized user to another credit card account earlier than that.

Applying for a credit card if you’re under 18

Becoming an authorized user is your sole option for getting a credit card. This means you’re allowed to make purchases with someone else’s credit card account, typically with your own card in your own name.

In this case, the primary cardholder is held liable for your balance. And if they pay the balance on time, it can positively affect your credit score. Note, this only works with card providers that report authorized users to credit bureaus.

But don’t get wild with your spending. If the primary cardholder fails to pay their balance, it can stain your credit score for years to come.

Applying for a credit card if you’re 18 to 21

You can apply for a credit card if you’re 18 to 21 years old, but you must prove you can independently pay your card bill. You can report income such as scholarships and grants or wages, if you have a job.

  • Don’t have sufficient income?
    You may be able to add a cosigner, who agrees to repay your card provider if you can’t pay your bill. Preferably, this cosigner has a strong credit history, as your provider will use that information to evaluate your application.
  • Don’t have a cosigner?
    If you’re in college, consider a student credit card. Providers are typically willing to offer this card type to applicants new to credit. A secured card is also an excellent option. Because you’re required to put down a security deposit before opening the card, a provider may feel more comfortable accepting you as a customer.

Applying for a credit card if you’re over 21

If you’re 21 or over, federal law doesn’t require you to prove your ability to pay your card bill. Typically, credit card providers don’t ask you for this information, but they may do so if they’re unsure if you can repay your card bill.

Two of the most important factors that decide whether you’re approved are your credit score and your annual income. You have better odds of approval if you have a FICO score of at least 670 and a debt-to-income ratio below 35%.

What is debt-to-income ratio?

Your debt-to-income ratio (DTI) is your monthly debt repayments divided by your income.

In the eyes of lenders, the lower the DTI the better. This hints that you have enough free income each month to repay your card bill.

What are my options?

Be realistic. Don’t expect to get a prime luxury credit card or market-leading introductory APRs. The best offers are usually offered to those with established credit.

This may be the first time you’re trying to borrow money in any form. Your credit report could be sparse, meaning lenders will consider you a higher-risk borrower. They don’t know whether you’ll pay your debts on time.

If you are approved for a credit card, you’ll probably receive a low credit limit and a relatively high interest rate. If you use the card correctly, it’s no big deal: As long as you pay your balance in full every month, you won’t be charged any interest. But if you habitually carry a balance, a credit card can quickly become a very expensive way of borrowing money.

Consider these options if you’re starting out with credit

Look into these credit options and pick one that fits your personal and financial circumstances.

  • Student credit card.

    If you’re enrolled in college, you may have an easier time getting started with credit. That’s because there are cards geared specifically toward college students that typically have no annual fees and student-specific perks, such as extra rewards for good grades.

  • Secured credit card.

    A secured card requires an upfront security deposit. Because of this, a secured-card provider is typically more willing to accept a consumer with shakier credit.

    Consider this type of card if a student card is out of reach or if you have subpar credit. It can help you build credit as you make on-time payments. Some providers will let you graduate to an unsecured card if you use your card responsibly.

Why would I get a credit card?

Credit cards are not as essential as everyday bank accounts, but they can play an important role in your finances and come with their own pros and cons. Here are some of the most popular reasons to apply and start using a credit card.

  • Build credit history.
    Credit cards can impact your credit score and your ability to get other loans. Just be sure to pay your credit card account balance off in full by the due date on each statement.
  • For emergencies.
    Whether it’s a parking fine, a car accident or a nasty surprise at the dentist, major, unexpected costs are a part of being an adult. If you don’t have enough money in your bank account to cover emergencies, you could use a credit card to pay what’s required upfront.
  • Essential, big-ticket items.
    A credit card may help ease some of your cash flow concerns by allowing you to buy what you need when you need it. You may even be able to avoid interest charges by getting a credit card with a 0% intro APR period.
  • Overseas trip.
    Whether you’re taking a gap year or going on an overseas trip for a few weeks, a credit card can help provide financial security when traveling. Consider a credit card with no foreign transaction fees.
  • Student costs.
    Students have a range of costs that can be hard to cover upfront — especially if you’re only able to work part-time while you’re studying.

Pros and cons of getting a credit card as a young adult

Pros

  • It may give you more breathing room with your budget. You can use your card throughout each month and pay off your purchases during your grace period. This can be helpful when you’re working with a tight budget or while you’re waiting for your paycheck to arrive.
  • It helps you build your credit score. As you consistently make on-time payments, your credit score will steadily go up.
  • You might even bag a few perks. When you’re starting out with credit, don’t expect too much in terms of card benefits. But you could earn rewards and student-specific perks that you wouldn’t get by using a debit card or cash.
  • You’ll learn early how credit cards work. When you’re ready to apply for more powerful cards, you could already be well-versed in how to use a credit card responsibly.

Cons

  • Low credit limits. Lenders won’t initially trust you with much credit. However, your provider may review your account and offer a higher credit limit after you’ve had your card for a while.
  • High interest rates. Carrying a balance is an especially bad idea when you’re starting out, as your card’s APR will likely be high.
  • Risk of getting into debt. You may encounter many temptations to spend, and having a credit card can make you feel like you have more money than you really do. Strongly consider spending only what you can pay off in full each month.
  • Risk of damaging your credit score. If you don’t use your credit card responsibly — such as missing payments or exceeding your credit limit — you could hurt your credit score.

How to improve your chances of approval when applying for a credit card

If you’re ready to apply for a new credit card, there are several ways to increase your chances of approval. You can start by comparing credit cards so you can find an option that suits your needs. Then check the eligibility requirements and get all the necessary details and documents together for the application.

Compare credit cards

Data indicated here is updated regularly
Name Product Filter values Rewards Purchase APR Annual fee
Blue Cash Preferred® Card from American Express
6% on select US streaming services, 3% on transit and US gas stations, 6% at US supermarkets on up to $6,000 annually, then 1% after that and on all other purchases
0% intro for the first 12 months (then 13.99% to 23.99% variable)
$0 intro annual fee for the first year ($95 thereafter)
Perfect for families: Get up to 6% on everyday purchases and a welcome offer worth $300. This heavy-hitter rewards card has uncontested value. Rates & fees
Blue Cash Everyday® Card from American Express
20% at Amazon.com up to $200 back in the first 6 months, 2% at US gas stations and select US department stores, 3% at US supermarkets on up to $6,000 per year, then 1% after that and on all other purchases
0% intro for the first 15 months (then 13.99% to 23.99% variable)
$0
This everyday cashback card is ideal for Black Friday and holiday shopping with 20% back at Amazon.com up to $200 back in the first 6 months. Rates & fees
Chase Freedom Flex℠
5% back in rotating categories up to $1,500 combined each activated quarter (then 1%), 5% on travel purchased through Chase, 3% on dining and drugstores, and 1% on all other purchases
0% intro for the first 15 months (then 14.99% to 23.74% variable)
$0
Get up to 5% cashback in rotating and newly added everyday categories. The refreshed Freedom Flex card has lots of earning potential.
Chase Sapphire Preferred® Card
5x points on Lyft, 2x points on travel and dining and 1x points on all other purchases
15.99% to 22.99% variable
$95
Earn a signup bonus worth $750 with this popular travel card. Combine with other Chase Ultimate Rewards cards for even greater value.
Citi® Diamond Preferred® Card
N/A
0% intro for the first 18 months (then 14.74% to 24.74% variable)
$0
An impressive 18 months intro APR on balance transfers and purchases, as well as no annual fee make this one of the top 0% APR cards available.
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Compare up to 4 providers

Bottom line

When used responsibly, credit cards can become a convenient, practical and valuable part of your adult finances. If you play your cards right, they may even help you get approved for a home loan or other financial products in the future. And once you’ve become comfortable handling your credit card, consider scoping out a top-rated secondary card that perfectly complements your first.

If you haven’t found the best credit card for your needs, compare other credit card options until you do.

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