First Credit

A Young Person's Guide to Great Credit

Getting your first credit card and using it wisely is key to developing and maintaining good credit your whole life. Many young people and students in recent years were targeted with credit cards they could not handle and are now suffering the results of the choices they made with their first credit card. Learn how to choose the right card and use it to build your credit with this review.

Credit CARD Act

The recent passage of the Credit Card Accountability, Responsibility and Disclosure Act which went into effect in 2010 makes it more difficult for young people and college students to acquire credit cards. The Act addresses the fact that young people lured by credit card giveaway programs and easy credit ended up in credit nightmares that they could not handle. Under the provisions of the Credit CARD Act credit card companies can only issue credit cards to young adults under the age of 21 if there is an adult co-signor or the young person can show proof of sufficient income to use the card. Credit card booths and credit card marketing is now expressly banned from marketing at or near college campuses or college events.

Getting your first credit card

If you are ready to apply for your first credit card either because you are employed with enough income to apply or you have an adult co-signer or you are over 21 then you need to be prepared to choose wisely when applying for your first card. The benefits of having a credit card include convenience, building a credit history, qualifying for lower rates on auto loans or mortgages and reducing insurance premiums. A good credit score can also help in renting your first apartment, buying a cell phone service or your first car.

Check out the offers

1. Look at the interest rates and fees. There are lots of different cards to choose from and it can be hard to tell which offers will work best for you. Avoid cards that offer initial low interest rates that has the potential to increase in the first year. Typical fees for a student card run around 14% - 17% Don't accept offers from credit card companies charging high annual fees.

2. Do check out student credit cards offered by major credit card companies.

3. Make sure that the card you choose reports to all three credit bureaus: Equifax, Experian, and TransUnion. This is important because you want to make sure that you are building your credit history.

4. Only apply for one card at a time and preferably only one a year. This will help limit the possibility that you will get in trouble financially.

Use your card wisely

Once you get your first credit card be sure and use it wisely to start and keep your good credit history and responsible first credit experience. Below are excellent choices for a first credit card.