The best way to go about getting your first credit card is to talk to your parents, then Altier. Once you turn 18, you can apply for a credit card, but you may need a parent to co-sign. Starting with a credit card first can help you build credit and practice managing your finances before needing any future loans.
A credit card is much like a loan. Whatever you buy with your credit card will need to be repaid like a revolving loan with interest. For your first credit card, you most likely will be given a low balance limit (how much you can borrow up to; your credit card dollar amount limit) like $100 or $500.
Before getting your first credit card:
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Learn to manage cash first: practice managing your money and making purchases with cash first. |
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Altier debit card or ATM card. Because the money instantly comes out of your Altier savings or checking account for your purchases or ATM withdrawals, you'll find this type of card reinforces the importance of limiting your spending. Be sure to save receipts from your purchases or ATM withdrawals and deduct the amount from your account balance immediately in your checkbook register or through online banking. |
Other things to remember when getting your first credit card:
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Only get ONE credit card, and even as you get older, try to have just one and not many. |
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When shopping for a card, look for one that has no annual fee, a low interest rate and a 20- to 30-day grace period (the amount of time you have to pay for new purchases before interest is charged), like the one from Altier. |
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Avoid cards that charge a processing fee or have low introductory interest rates that shoot up after a few months. |
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Consider a credit card that has rewards points to redeem for free stuff like the one at Altier. |
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Pay the balance in full every month to avoid interest charges. |
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Mail in or pay your credit card payment online at least one week before the due date to avoid late fees, which will impact your credit. |
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Do not use the cash advance (similar to an ATM withdrawal of cash from your credit card available balance) from your credit card unless it's an emergency. |
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Your credit history will follow you. Falling into debt and paying bills late will negatively impact your ability to get a loan in the future. Even employers and landlords can look at credit records to decide if they want to hire or rent to you. |
If your parent/guardian co-signs on a credit card for you, before pulling it out to pay for something for the first time, ask yourself: "Would I really go to the bank and take out a loan for this?" If the answer is no, don't use your credit card. Instead, use your Altier debit card or cash. Credit cards are great for building or maintaining good credit and earning reward points, but shouldn't be used for day-to-day purchases like food or gas. |
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