Applying for your first credit card can involve a considerable learning curve.
“Student cards and other simple, unsecured cards are ideal for those who are new to credit.
And if youmiss payments, you risk wrecking your credit score and racking up interest charges.
The best way to avoid these pitfalls is to understand the basics of credit cards.
The credit card issuer typically uses your credit score and your income to determine your credit limit.
So if you’re just starting out, your first credit card will probably have a low credit limit.
Every card has its ownannual percentage rate, which is the interest and fees it charges on unpaid balances.
Fees and interest charges can add up quickly and prevent you from paying off your debt as quickly.
Here’s what it’s crucial that you know about each kind of card.
These cards usually have a smaller credit limit and may offer fewer rewards and benefits, with some exceptions.
Secured credit cards require a refundable security deposit that acts as your credit limit.
Rewards credit card
Arewards credit cardlets you earn a reward for your purchases with the card.
Rewards can include cash-back, travel points and airline miles.
Some cards let you earnwelcome bonusesfor spending a minimum amount within a specified period.
Some credit card companies will solicit you directly or allow you to see if you arepreapproved for a card.
But there are alternatives to consider.
It has not been provided or commissioned by any third party.
However, we may receive compensation when you choose links to products or services offered by our partners.
