4 Things to Consider Before Opening Your First Credit Card

If you’re in the market for your first credit card, it can be difficult and overwhelming to navigate the plethora of cards, terms, promotional offers, and rewards programs. Where to even begin?

To help you through this important life step, we’ve gathered some insights to make the decision a little easier. Let’s start with the basics.

1. What is Credit?

Put simply, credit is the ability to borrow money or an item of value with the intention and promise of paying it back later. Credit is something you have to apply for, and the amount and terms of your credit are based on your credit history.

Your credit report and credit score impact how much credit you can be approved for.

A credit report is a history of your financial behavior which includes any credit accounts you have open along with their current balances, your payment history for those accounts (including late payments), loans you’ve taken out, and any financial disruptions like bankruptcy or foreclosure.

Your credit score is a three-digit number based on your credit report and credit history, which helps determine and establish your creditworthiness. A credit score generally ranges from 300 to 850, with higher numbers corresponding with better credit.

To raise that credit score and increase your creditworthiness, you need to prove that you can responsibly manage credit and pay it back on time.

While you can build credit in a number of ways, a great way to start is by using a credit card.

2. Starter Credit Cards

Weird as it may sound, you need credit history to get a credit card. But what if you have never had a credit card before? Starter credit cards can help.

Secured Credit Cards

Secured credit cards are available to almost everyone and have a low level of risk to both the borrower and the issuer. First, you make an upfront cash deposit to secure the card. This is used to pay off your card if you fail to make payments. Aside from that, it functions much like an ordinary credit card. You can use your card to make purchases, then you’re expected to pay by the due date each month. If the balance isn’t paid in full, then the leftover balance incurs interest charges. Once you close the account, your cash deposit is returned to you. To best build your credit, make sure that you make payments on time and, if possible, pay the balance in full each month.

Retail Credit Cards

Virtually every big retailer offers their own credit cards that usually have low credit limits and bonus deals on merchandise. While they generally have higher than average interest rates, if used carefully, retail credit cards can be a way to save from stores that you regularly patronize. If you decide to go this route, keep an eye on your spending and try to pay your full balance each month.

3. Keep an Eye on Interest Rates and Fees

If you do not pay off the balance of your credit card within a specified window of time, generally a month, the balance due will begin to accrue interest. The interest rate, also known as the annual percentage rate (APR), varies between different credit cards.

You may also be charged a late fee if you fail to make a payment on time.

Some credit cards have an annual fee. This fee also varies between credit cards, and there are many cards that do not have an annual fee. Some credit cards offer promotional terms, such as offering to waive the annual fee for your first year.

Avoid fees by making sure to pay off your balance every month on time and by searching for credit cards without an annual fee. A great way to ensure that you keep up with your payments is by using an autopay feature. Autopay allows you to pay your balance automatically every month using the payment method of your choice. This way, you won’t have to worry about making a late payment and incurring late fees.

Another great option is to use a credit card with a low APR, such as the Vantage West Connect Visa. With the Connect Visa, enjoy an ultra-low introductory rate (as low as 2.99% APR for 6 months) and as low as 8.25% APR thereafter for well-qualified applicants.

4. Rewards Programs

Many credit cards offer rewards programs to incentivize you to use their card. Rewards can range from cashback on everyday purchases, to airline mileage, to free food and drinks, and even free nights at hotels. Choosing a credit card with a rewards program is a great way to build credit while earning fun perks.

Check out the Vantage West Connect Rewards Visa Signature, which gives you double the points on groceries, triple the points on gas and five times the points on a category of your choice.¹

Credit cards are a great way to begin establishing credit without taking on an unreasonable debt load. If you stay on top of your spending and develop good habits, credit cards can be a valuable asset in your life rather than a burden.

Ready to learn more? Here are 3 Ways To Help You Build Credit History Check out our selection of credit cards to start establishing credit.

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Disclosures: 

Card type and APR are based on creditworthiness. Connect Visa introductory rates are 2.99% APR to 4.99% APR. Standard rates after six month introductory period range from 8.25% APR to 17.95% APR. The Connect Rewards Visa Signature has introductory rate of 0.00% for six months, for qualifying Members. Standard rates after six month introductory period range from 13.74% APR to 21.74% APR. Rates are variable and are subject to change. All loans are subject to credit approval. Certain restrictions may apply. An annual fee of $25.00 may apply. Promotion offered only for new Connect Rewards and Connect credit cards and does not apply to increases, conversions or re-opening of a closed credit card. Vantage West Rewards terms and conditions.

¹ Capped at $1,500 spent in qualifying purchases quarterly. Cash Back rewards are tracked as points and each $1 in Cash Back rewards earned is equal to 100 points. Points can be redeemed for cash back, merchandise, gift cards, travel, and charitable donations. Cash redemption starts at 2500 points.