Tips on Getting Your First Credit Card in 2012

Are you planning to apply for your first credit card in 2012?  If yes, what are your possible choices?  Which credit card is best for you and how can you use it for your benefit?  Consider these tips:

Credit Card Options for First Timers

Secured Credit Card.  Anyone can acquire a secured credit card because approval is not based on credit history or credit score.  The basic requirement to get a secured card is the cash deposit which can range anywhere from $200 to $500.  The minimum required cash deposit depends on the issuer and the desired limit.  The credit line provided will be based on the amount of the security deposit so if you need a higher limit, be prepared to submit a larger deposit as well.

Prepaid Credit Card.  Prepaid credit or debit cards can be used for payment like a regular credit card.  However, a prepaid cardholder does not have the privilege to make purchases in advance and pay later.  To use a prepaid card, you must first deposit funds in the account.  Bills paid with a prepaid credit card are instantly paid with the available balance.  When the balance runs out, the cardholder must reload or make a new deposit to use the card for new transactions.

Student Credit Card.  If you are a student, you can also apply for a credit card that’s especially designed for students. However, you will still need to have a co-signer if you are below 21 years old unless you can show proof of independent income.  Student credit cards do not require good credit since these cards can actually be used to establish credit history and build up credit score.

Pointers to Remember When Choosing Your First Credit Card

Check the rates and fees.  For secured credit cards and student credit cards, you should choose a card with a reasonable interest rate. Although you can avoid the interest rate fee by paying off your full balance each month, having a low rate card will still protect you from the risk of debt build-up just in case you may need to carry a balance.

You should also know the exact fees associated with the credit card- whether it’s a secured, student, or a prepaid credit card. Common credit card fees include annual fee, late fee, over-the-limit fee, balance transfer fee, etc.

If you’re looking for a prepaid credit card, you need not worry about interest rates but you need to watch out against prepaid cards that carry too many fees which can be a real burden.  For example, prepaid credit cards are known to impose set-up fee, monthly fee, inactivity fee, and per transaction charges- just to name a few.  How much will you need to spend in a year to keep you prepaid card active?  Some prepaid card issuers will even charge their customers who call for assistance so you need to be very careful with your choice.

Choose a card that reports to the major bureaus.  Be sure to choose a credit card that will report your payments to the three major credit bureaus.  This rule applies whether you are applying for a secured credit card, a prepaid card or a student credit card.  Use the card to build your personal credit by managing the account responsibly.

About the Author:

Tara Tiemann is the credit specialist for Go-Prepaid.  Which is a resource site for people who want to live debt free! If you are on a budget, using a secured credit card and prepaid credit card can save you big money!

About Liz Roberts

Liz Roberts is the new credit specialist for Go-Prepaid. If you are on a budget, we can get you discounted cell phone service from Sprint, Verizon and T-Mobile! NO CREDIT CHECK ! Using a prepaid services can save you a TON of money! Follow our blog to find out how!

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