It’s one of the catch-22s of of modern life: you want your first student credit card but haven’t had the time to build enough credit to get one. Much like getting a first job with no real-world experience, getting your first credit card can be tough. The Credit Card Act of 2009 provided consumers with important benefits, such as fee restrictions, more time to pay, and the end retroactive rate increases. It also made more difficult for credit card companies to give out cards to consumers under 21. This act had good intentions – namely protect students and other new users from falling into debt – but it’s also made the path to credit a little more difficult.
Related Article: 10 Best Student Credit Cards in 2016.
Getting your first card can be a positive step toward building good credit and learning to spend responsibly. Here are some tips to help you make it through this financial rite of passage:
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Get a job
You must be 21 to get your first card, unless you can show you have sufficient income or assets to pay the minimum payments on the account (source). Another option is to ask a friend or a relative who is 21 or older to cosign on the account. More on that later.
It gets a bit easier once you pass your 21st birthday, but you’ll still need to provide proof of income. If you have friends or relatives who are under 21 and they ask you to help them get a credit card, remember you will be liable for their purchases. If they don’t make payments on their account, it could hurt your credit.
Find a cosigner
If you’re not able to get your own card, a parent or guardian can co-sign for you, but they must provide proof of income and have good credit standing. Tread carefully when mising finances with friends and family. This is huge favor to ask because if you are late with payments or overextend yourself, your poor decisions will directly impact your cosigner’s credit score.
Apply for a secured credit card
A secured credit card is more like a savings account than a credit card because you are typically required to put down a deposit that matches your credit limit. However, the good news is that this type of card can help you build a credit history and improve your credit score.
This is somewhat like having a cosigner, but less risky for the cosigner. This type of credit card has your name on it, but is tied to another credit card holder’s account. If the main account holder makes regular payments and has good credit, this can help you improve your credit score also. However, not all credit card companies report authorized users to the credit reporting agencies. Check if the company you’re considering does (source).
Try your bank
If you have a checking or savings account in your name and have been responsible using those accounts, your bank may also be a good place to apply for your first card. This is particularly true if your parents bank there and have some rapport with one of the bankers. You may not get an unsecured credit card, but you have a good chance of landing a good deal on a secured credit card. Sometimes going to the branch and applying face-to-face can help too, rather than applying online.
Get a retail card
If you get a retail card, such as a GAP or Victoria’s Secret credit card, you can only use the card in those particular stores. However, these type of cards are often easier to get and can help you build your credit. Watch out for high interest rates and try to pay off your balance in full every month. Here’s a list of store credit cards we recommend.
Before applying for your first card, make sure you have sufficient income and self control to handle one. If you fall into debt with your first card, it can be a difficult hole to climb out of. But, if you handle your credit well, it can provide you with many opportunities.
Shop around for your first student credit card
If you’re attending college, you may have a good chance of getting a student credit card from a major company. However, some student cards have annual fees and high interest rates, so make sure you look into all of the options when applying for that first card.
SuperMoney’s student credit cards database allows you to filter credit cards by the features that matter to you, such as $0 annual fees and low interest rates. You can also read expert and consumer reviews on the credit cards that make your shortlist.