1.19.22

How to Get Your First Credit Card

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A man smiling at his computer screen as he holds his credit card.

What to consider when choosing the credit card that best meets your needs.

If you’ve never had a credit card it might be tempting to apply for the first unsolicited application you get in the mail or for a store card that offers a discount upon approval. However, a casual approach to obtaining a credit card could be very costly. Here’s what you need to know about getting your first credit card.

Is there an annual fee?

Many cards require an annual fee that can range from $95 to $500, an expense that you’ll pay every year you hold the card. For some people, a robust rewards program (more about these below) makes the annual fee worthwhile. However, for most budget-conscious folks, a card with no annual fee is a wiser financial move.

What is the interest rate?

An interest rate is the amount a lender collects from a borrower as part of a loan. Typically measured as a percentage of the principal, the amount loaned, your interest rate depends largely on your credit score. The higher your credit score, the lower the interest rates you can get. However, even an excellent credit score doesn’t mean a card issuer will offer you the best rate available. Compare credit cards to see which card has the best offer.

Also, there are several types of interest rates that you should be aware of:

  • The Annual Percentage Rate (APR) the interest charged on a loan over the period of a year for purchases after a grace period, typically three weeks.
  • An Introductory APR is a temporarily lower rate offered at the beginning of a loan.
  • Balance Transfer APR refers to the interest rate a lender would pay when the balance of one credit card is transferred to another credit card. As a first-time credit card holder, you won’t be transferring any balances, but it’s important information to have for the future.
  • A Penalty APR is a higher interest rate that could be automatically triggered if you fail to make the minimum monthly payment.
  • When using cash advances, Cash Advance APR begins accruing the moment you use your credit card to access cash. Additionally, the interest rate for cash advances is typically much higher than regular credit card purchases. 

Is there a rewards program?

Most, but not all, credit cards (including cash back credit cards) offer rewards, which can include cash back, redeemable points or even airline miles. When selecting a credit card, consider your lifestyle and financial goals. For example, a robust rewards program might balance out some of the less desirable aspects of a credit card.

Protect your card info

The Fair Credit Billing Act provides some liability protection in case your card is lost or stolen. However, it’s still important to keep your card information confidential, including your account number, the card’s expiration date and security code. If your card is lost or stolen, report it immediately. The card issuer will cancel the existing card and issue you a new card with a new account number.

Carefully review your statement each month to make sure the charges listed are yours. If you see charges for purchases you did not make, notify your credit card issuer right away. Many card issuers will not hold you liable for any charges related to fraud, but you must report the unauthorized charges within a limited period.

Understand how credit cards affect your credit score

Since every credit card application is reflected on your credit score be selective about how many cards for which you apply. While a store credit card offer may be tempting at the moment, applying for that often-high interest store credit card could lower your credit score. If you’re planning on a large purchase, such as a vehicle or a home, consider delaying opening any new credit cards until you’ve signed the loan for the larger purchase.

Your credit score is also affected by how much of your available credit is in use, so maxing out your credit cards can lower your credit score. A guideline for using credit cards without negatively affecting your credit score is to use no more than 30% of the credit available to you from all cards combined.

Additionally, paying your credit card bills on time each month will help boost your credit score.

Understand minimum payments

When you receive your monthly credit card statement, you’ll see your total account balance and the minimum payment due. By paying the minimum you avoid late fees, but you will end up paying more money to interest while making little headway toward paying down the principal debt. Also, if you continue to use the card for purchases, your balance will continue to grow, and you will accrue additional interest on all new transactions.

Making minimum payments can be a useful short-term strategy if cash is tight, but as a long-term strategy it can be very costly.

Why choose a Consumers credit card

As a member of Consumers, you’re eligible to apply for the Consumers Cash Back Mastercard®. Thousands of members have made this their credit card of choice because it offers:

  • Unlimited 1.50% cash back*
  • No annual
  • Competitive rates
  • Free Mastercard ID Theft protection

Get more details and apply for the Consumers Cash Back Mastercard, as well as our other competitive credit cards on our website.

 

*Earn 1.50% Cash Back for every one dollar spent on purchases less credits, returns, and adjustments during a statement period. Cash advances, balances transfers, fees and finance charges do not earn Cash Back. Cash Back earned during your billing cycle will be disclosed on your credit card statement. Cash Back is available for redemption as transactions post. Members must redeem Cash Back in $1.00 increments. Cash Back redemptions to a deposit account or for statement credit will not satisfy the minimum payment due. This product is limited to personal credit cards. Approval subject to credit review. For more details, please refer to your Truth in Lending Statement or Cardholder Agreement accompanying your card.

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