The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Get Help
    • Money Coach University™
    • Books
    • Financial Coaching
    • Speaking
    • The Money Coach Recommends™
  • Contact
  • Building Wealth
  • Investing
  • Credit Scores
  • Student Loans
  • Paying for College
  • Saving Money
  • Real Estate
  • Credit Card Debt
No Result
View All Result
The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Get Help
    • Money Coach University™
    • Books
    • Financial Coaching
    • Speaking
    • The Money Coach Recommends™
  • Contact
No Result
View All Result
The Money Coach
No Result
View All Result

What Is a Good First Credit Card for a Young Adult?

Lynnette Khalfani-Cox, The Money Coach by Lynnette Khalfani-Cox, The Money Coach
in Credit Cards
Reading Time: 3 mins read
What Is a Good First Credit Card for a Young Adult?
12
SHARES
195
VIEWS
Share on FacebookShare on Twitter

Having a credit card – or even a couple of credit cards – isn’t always a bad thing for young adults, provided they learn about credit management and use credit wisely.

If you (or your child) have just turned 18, are preparing to enroll in college or even graduated from school fairly recently, you need to work hard to build a positive credit rating and get your credit track record off to a good start.

A good credit score is a measure of how well you handle your credit obligations and may help you rent an apartment or get a mortgage in the future, secure a car loan at a competitive rate, or even qualify for cheaper car insurance.

Many creditors and non-creditors alike (such as prospective employers) review an individual’s credit report during the application process, so it’s a good idea to have at least one credit card on your record.

But how do you choose a credit card when you’ve never had one before?

Here’s what you need to know about the types of credit cards that are usually best if you’re getting that first credit card.

Bank Credit Cards to Build Credit

Many banks offer unsecured credit cards such as a Visa card or a MasterCard to eligible applicants.

If you are just starting to build up some credit history, it’s likely that your credit limit on these cards will be very low. Remember, however, that your goal isn’t to use these credit cards to make frequent purchases or to go out and charge big-ticket items.

You just want to charge relative small amounts and use the card to establish some credit history. You’ll do this by regularly charging modest sums on your credit card and then (a few charges per month are plenty). Then you must make sure that you’re making at least the minimum payment every month so that you maintain a good payment history record. Ideally, you would pay off the balance in full.

Keeping your credit balances low – or even at zero balances after you pay off your monthly bill – will help boost your credit score. That’s because 30% of your FICO credit score is based on how much credit card debt you owe; having lower balances increases your score, while higher credit-card balances drag down your credit score.

Store and Gas Credit Cards

If you aren’t approved for a bank credit card, you can try to get a department store credit card or a credit card from a gas company instead.

These types of credit cards aren’t the best to have from a credit standpoint, but they are an option since they’re usually much easier to be approved for and can still be used to build some credit history.

If you do charge purchases on a department store card or a gas card, remember that these types of cards often carry very high interest rates. So you’ll definitely want to keep your balances to a minimum and make sure to always pay more than the minimum payment so you’re not collecting interest each month. Once again, paying off your balances in full is the optimal way to handle your cards.

Secured Credit Cards to Build Credit

Secured credit cards can be easier to get than other credit cards because they require the cardholder to pay a deposit. This deposit acts as the credit card limit, so you are essentially paying for a credit line just to establish some credit history.

Secured credit cards can be a last resort if you aren’t eligible for any other types of cards, and they do have limitations.

Some carry relatively high fees that are incurred right away on your account. This means you’ll probably see your deposit shrink over the course of the year just to maintain the card. Still, a secured card is a good alternative for those who cannot get any other type of credit card to build credit history.

One final note about secured cards: do make sure you only get a secured card that reports your payment history to the credit bureaus. If a bank or credit card issuer doesn’t transmit information about your secured card, its monthly balances and your payment data to Equifax, Experian and TransUnion, then that card won’t do anything to establish or boost your credit rating.

Tags: card to build creditsecured credit cards
Previous Post

4 Things To Consider Before You Consolidate Credit Card Debt

Next Post

5 Ways to Evaluate and Get the Best Credit Card Deals

Related Articles

pay credit card balance in full
Covid-19

3 Items to Buy With a Credit Card During COVID-19

by Lynnette Khalfani-Cox, The Money Coach
coronavirus credit card debt
Covid-19

Coronavirus and Credit Card Debt: What Lenders Want You to Know and Do During COVID-19

by Lynnette Khalfani-Cox, The Money Coach
Rewards credit cards holiday spending strategy
Credit Cards

5 Strategies for Using Rewards Credit Cards When Holiday Shopping

by Guest Blogger
credit-card-benefits
Credit Cards

How to Negotiate a Lower Interest Rate on Your Credit Card

by Lynnette Khalfani-Cox, The Money Coach
maxed-out credit card
Credit Cards

The Most Maxed-Out Places in America

by Guest Blogger
credit-card-benefits
Credit Cards

4 Apps that Tap Into Your Credit Cards Hidden Benefits

by Lynnette Khalfani-Cox, The Money Coach
pay credit card balance in full
Credit Cards

Should I Pay My Credit Card Balance In Full Each Month?

by Lynnette Khalfani-Cox, The Money Coach
approved for a credit card
Credit Cards

How To Get Approved For A Credit Card

by Guest Blogger
credit cards
Credit Cards

The Best Credit Cards to Reach Your Financial Goals

by Guest Blogger
Next Post
5 Ways to Evaluate and Get the Best Credit Card Deals

5 Ways to Evaluate and Get the Best Credit Card Deals

About

Lynnette Khalfani-Cox, The Money Coach®, is a personal finance expert, speaker, and author of 15 money-management books, including the New York Times bestseller Zero Debt: The Ultimate Guide to Financial Freedom.

Lynnette has been seen on more than 1,000 TV segments nationwide, including television appearances on Oprah, Dr. Phil, The Dr. Oz Show, The Steve Harvey Show, Good Morning America, The TODAY Show and many more.

Quick Links

  • Money Coach University
  • Lynnette's Personal Site
  • The Money Coach Corporate Site
  • Video Portfolio
  • Privacy Policy

All information on this blog is for educational purposes only. Lynnette Khalfani-Cox, The Money Coach, is not a certified financial planner, registered investment adviser, or attorney. If you need specialty financial, investment or legal advice, please consult the appropriate professional. Advertising Disclosure: This site may accept advertising, affiliate payments or other forms of compensation from companies mentioned in articles. This compensation may impact how and where products and companies appear on this site. AskTheMoneyCoach™ and Lynnette Khalfani-Cox, The Money Coach® are trademarks of TheMoneyCoach.net, LLC.

©2009-2022 TheMoneyCoach.net, LLC. All Rights Reserved.

No Result
View All Result
  • Meet Lynnette
  • Money Coach University™
  • Books
  • Financial Coaching
  • Speaking
  • The Money Coach Recommends™
  • Media Kit
  • Contact

©2009-2021 TheMoneyCoach.net, LLC. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist