What You Need to Know about First Time Credit Cards

If you’re looking to build or improve your credit, you’re likely considering a credit card. If you’ve never owned one, you could be confused at the different types of cards available and which one would be best for you. While we can’t tell you which card is best for you, we can help you understand the different types of cards available so that you can make an educated decision.

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Let’s Talk about Credit

One thing to consider is whether you have no credit or if you are looking to rebuild your credit. Both present their own unique challenges. If you have good credit, and you’ve just never owned a credit card, you might have a few more options available than you initially thought. Regardless of whether you have no credit, you’re rebuilding your credit, or good credit, you should pull a copy of your credit report. Some people advise that you also check your credit score. However, checking your credit score can cause it to go down. You can pull a free copy of your credit report from Annual Credit Report. The purpose of checking your credit report (for free) each year is to allow you to review your credit. Whether you’ll be approved for a credit card will depend on your ability to pay your debts along with your income. The lender will consider items such as late payments, charge offs, and bankruptcies. There’s another important reason why you should check your credit each year. You can ensure its accuracy. If there’s an error or you’ve been a victim of identity theft, having your credit report helps you correct it.

What You Need to Get Your First Credit Card

While each credit card company or financial institution will have different requirements, there are a few things that you will need to get your first credit card. You need a social security number or a tax payer identification number. You need income of some kind that can cover the bill (credit card companies and financial institutions will consider what is known as your debt-to-income ratio; that is, how much money you owe to creditors and how much money you make). You need a fair credit score. The better your credit score, the more likely it is that you’ll get approved for your first credit card. If you have no credit at all, you may need a co-signer for your first credit card. The purpose of a co-signer is to guarantee to the credit card company or financial institution that whatever is charged to the card will be paid. In short, if you don’t pay, the credit card company or financial institution will go after the co-signer for the money. Think long and hard about using a co-signer and who you would ask.

A Secured Credit Card as a First Credit Card

Secured credit cards are a good first credit card for people with no credit or for those looking to rebuild their credit. It can even eliminate the need for a co-signer in many instances. A secured credit card is generally approved for a few hundred dollars. After you’re approved, you would send in the amount of the credit line. For instance, if you’re approved for a $300 credit line, you would secure the card with a $300 deposit. You’d still use the card like a traditional credit card. You couldn’t go over your credit limit. You’d still make your monthly minimum payment or pay off your credit card at the end of each month. The deposit you made protects the interest of the company that provided you with the card. If you stop paying on the card, the company can use the money to pay it off. Secured credit cards can help you build credit. Just make sure that you understand the different interest rates that may affect it. We’ll talk about interest rates soon.

An Unsecured Credit Card as a First Time Credit Card

If you have good credit and you’ve just never owned a credit card, you may qualify to receive an unsecured credit card. With an unsecured credit card, you’re approved for a credit line. You’d make a minimum monthly payment (or more). If you’re looking for an unsecured credit card, look for one that meets your needs. If you travel, look for cards that provide things like cash back or frequent flier miles. If you want credit card rewards, consider cards that provide rewards for items that you buy on a regular basis. You’ll also want to consider whether a card has an annual fee and any other benefits provided by card. For instance, many credit cards provide you with identity protection, rental car discounts, or access to low cost disability insurance.

Interest Rates

When you’re considering your first credit card, it’s important that you understand the basics about interest rates.
- An introductory rate or introductory period means that your interest rate will be less for a certain amount of time. You may see this for purchases or for balance transfers.
- Purchases may have a different interest rate than a cash advance. If your credit card is unsecured, you may have the option to take a cash advance. Cash advances often have a much higher interest rate than purchases. Keep this in mind because you don’t want to be surprised when you see your bill.
- You could be subject to a penalty interest rate. If you miss a payment, your interest rate could change. However, not all credit cards have a penalty interest rate.
- Interest rates are affected by your credit. After your introductory interest rate expires, your interest rate will be variable and it will be affected by your credit. If you have no credit or if you’re rebuilding your credit, you’re going to have a higher interest rate.

Do Your Research Before Deciding on Your First Credit Card

Now that you understand the basics about credit cards, you’re ready to do your own research and make the big decision. While it’s okay to listen to recommendations from friends and family, ultimately you must choose the credit card that will work best for you.


Contact us today for more information.


Not all members will qualify. You must qualify for membership with Nymeo to be considered for a loan. Decisions are based on several factors, such as creditworthiness of applicant(s), capacity to repay, and value of collateral.


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