By Stephanie Miller


5 Min. To Read

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Getting your very first credit card can be pretty exciting. Whether it’s because you have a specific purchase in mind, want to start building your credit history, or just want to have it in case of emergencies, that first taste of plastic is a big deal.

This is why it’s important to approach those initial applications carefully. Here are a few of the big snags that commonly befall brand new credit cardholders, and how you can best avoid them.

Don’t Accept the First Offer That Comes Your Way

If you’re well into your adult years, you’ve probably received hundreds of card solicitations in the mail over the years. If you’re approaching your 18th birthday and/or heading off to college soon, don’t worry: the offers are coming. Unfortunately, they never seem to stop, either.

This is why it’s important to take some time to look around, rather than filling out an application for the first card offer that catches your eye. Gather up a few of your favorites, read reviews (on a site like this one!) to see what actual cardholders are saying, and compare the specs.

You’ll want to look at whether or not there’s an annual fee involved (for your first card, you should probably avoid these altogether). You should also determine whether the card offers any cash back rewards, cardholder benefits, or perks like retail discounts.

Will you actually use what they’re offering or will it go to waste? Could you find a card that’s better suited to your spending habits?

Take the time to lay out the pros and cons of each card that you’re considering.

Start Earning Rewards Early

There are only a handful of reasons to get a card that doesn’t offer some form of cash back rewards. So, unless you have a very good, specific reason, you should definitely be leaning toward a rewards credit card. These come in many forms. Some cards offer actual cash back, where you’ll earn (on average) somewhere from 1 to 5 percent cash back on the things you buy with the card. Sometimes, these are set percentages; other times, they involve rotating, quarterly categories.

Pay attention to what the card you’re considering offers, and whether it will maximize your spending. If the card offers 5% back on gas purchases, but you ride public transportation, you’d be better off looking at a different credit product.

Some cards will earn you points, some actual cash back, and others will give miles. Also look at how the rewards are redeemed. Can you simply get a statement credit when you want it, or are you forced to buy gift cards to specific retailers through the credit company’s website? Do points expire and are there minimums for redeeming what’s been earned?

Not only should you seek out a rewards card – to earn free money on what you’re buying anyway – but you should make sure that the earning and redemption policies are what’s best for your lifestyle.

Don’t Unexpectedly Sign Up for a Store Credit Card

It’s easy. You’re on a well-deserved shopping trip, spending a little more than you usual would, and the woman at the checkout tells you that you can easily save 20% today just by opening a store card. Great idea, right? Not so fast.

Store credit cards are rarely worth their weight. Unless it offers regular discounts (not just on sign-up day), it’s likely worth much less than a rewards credit card would be. Plus, if you just shop at that store on occasion, you’re not going to realize the perks very often.

That application, whether you’re approved or not, will result in a hard inquiry on your credit. Get too many of these, and your credit score will start to dip. Retail cards also often come with very high APRs, so unless you pay your balance in full each month every month, it’ll end up costing you a lot more than that 20% coupon was worth.

There’s also the fact that you’ll be stuck with a credit card that you can only use at one store. This is a stark contrast to a rewards card, which could be used anywhere.

Don't Become an Authorized User on a Bad Account

One option that many young adults take advantage of is jumping onto mom and dad’s (or someone else’s) credit card as an authorized user. While this has the potential to boost your credit, it can also cause damage if the account isn’t in ideal standing.

When you are added as a user on many credit cards, it will begin showing up on your credit report. This allows you to have a line of credit (building your credit utilization ratio) as well as a reported credit history. You can use the card and pay off your portion of the balance, all without opening an account in your name. Wins all around?

Not so much. This method has its downsides.

For starters, if the primary accountholder misses payments, those late notations will be on your history, too. This is a big deal and can have a huge impact on your score.

If the account balance is allowed to revolve (isn’t paid in full each month), it will affect your credit utilization ratio. If this gets too high (35%), it will negatively affect your credit.

While you won’t be responsible for any outstanding balances as an authorized user, a poorly managed account can still negatively impact your credit. Be sure that you don’t jump onto someone else’s credit card account unless you know it’s sound.

Only Apply for One at a Time

Once you’ve decided which card is right for you, send in your application. Then, stop.

One of the worst things you could do to your credit is to apply for multiple accounts at the same time. Not only will you rack up a number of hard inquiries, but the sudden influx of credit applications will make future lenders take a step back. Were you in financial trouble? Are you irresponsible with your money?

They don’t know, and they may not want to take a chance on the answer. If you’re approved for the first card, use it wisely for a few months (or longer!) before even considering another credit-based account. Build a solid history and develop healthy spending habits; it will protect you financially in the future.

Pay Attention to the Account

Once you have that first card in hand, it’s time to stay on top of the account.

This means looking out for that first statement and paying attention to the due date. If you’re paying the balance in full each month (as you absolutely should be), it would be smart to set up auto-pay from the get-go. Be careful with the first billing period, though, as automatic payments sometimes take a cycle or two to take effect.

If you don’t pay on time, you risk late fees and penalty APRs – which are even higher interest rates on any balance held on the account. It can quickly lead to a lot of wasted money.

Pay attention to any annual fees (if you chose a card with one) and when they are due. They are often waived for the first year, but take note as to when it will be charged the following year.

Also keep an eye on your rewards earned. Do they expire if they’re not redeemed? Are there quarterly categories for which you must opt-in? Stay on top of these things or risk losing cash.

Getting your first credit card is a big financial milestone. Handled responsibly, it can be an excellent way to begin building credit and earning cash back rewards. If you stay on top of the account from the very beginning, you can ensure a lifetime of living debt-free while still enjoying the benefits of credit card usage.

Be cognizant when seeking the perfect first card. Find the one that’s the perfect fit for you, then make sure to maximize your benefits.

Getting your very first credit card is a big deal. That's is why it’s important to approach those initial applications carefully. Here are a few of the big snags that commonly befall brand new credit cardholders, and how you can best avoid them.

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