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1. Are You a Student?
If you are, then you'll be better off with a student card. Your application is likely to get accepted without problems. It would be best to contact the bank where you have your student account before you do anything else.
2. Are You Transferring a balance from another credit card?
If you are, then you need to be looking for a card with a low APR on balance transfers. APR is the acronym for Annual Percentage Rate. APR is the cost of credit, expressed as a yearly interest rate. However, do be careful of credit card offers that promise 0% introductory rates for say 6 to 9 months. There may be a catch somewhere!
3. Do You intend to Make New and Large Purchases?
If so, then pay more attention to the APR for purchases, which is usually entirely different to the one for balance transfers. You should also look at what kind of grace period different cards offer, so you don't end up paying interest on your purchases straight away.
Also called a "grace period," a free period lets you avoid finance charges for a specified time before you are required to start paying your balance. Without a free period, the card issuer may impose a finance charge from the date you use your card or from the date each transaction is posted to your account. If your card includes a free period, the issuer mails your bill at least 14 days before the due date so you'll have enough time to pay.
4. Do You Pay Off Your Balance In Full Every Month?
If you have a lot of money or you only keep a credit card for emergencies, then you might just pay it all off each time you get the bill. If you do, then you're in a position where you obviously don't need to worry about the interest rate much at all, since you won't be paying any interest (make sure there's a grace period, though).
5. Do You Need to consider Other fees?
Many issuers charge annual membership or participation fees. Some issuers charge a fee if you use the card to get a cash advance, make a late payment, or exceed your credit limit. Some charge a monthly fee whether or not you use the card.
6. Need Good Customer Service Support by the Issuing Bank?
This can be an important factor especially in situations of lost card or a charge that you wish to dispute. You want customer service support that is friendly and helpful. Choose a reputable bank that has excellent call center help.
7. Which Reward Program is suitable?
You may wish to consider the card that offers you the best reward programs or frequent flyer points for your needs.
In conclusion, there will be plenty of offers of credit card deals and "pre-approved" credit card application forms in your mail. However, do take the time to shop around for the right credit card for yourself.
A credit card is a big deal to young adults. It's one way for them to feel like they're part of the grownup world. But credit cards can also be a way for a youngster to get themselves into serious adult trouble before they're ready for it. That's why it's important to follow a few important—but luckily simple—steps when shopping for your first credit card.
1. Shop Around
One of the first things you should know about getting your first credit card is how to shop around. Sure, you probably get a few dozen credit card offers in the mail every month. And every time you go to a ballgame, somebody offers you a free beach towel if you join their credit card. But these offers may not be the best. Try doing your own research on the Web to find the best credit cards for your situation.
2. Compare Annual Percentage Rates
Once you come up with a list of cards you may want to apply for, compare their interest rates, or the percentage fee they charge you for debt left on your card every month. It's important to know the difference between variable rate cards, and fixed rate cards. Variable means that the interest rate can change over time, so it may start out extremely low, but in six months, it could triple, quadruple, etc.
3. Compare Fees and Grace Periods
Don't just compare interest rates on cards either. You should know each card's annual fee, grace period (or time they give you to pay off each month's charges), late-payment penalty fees, over-the-limit penalty fees, and charges for cash advances. Of course, for these penalties and cash advance fees, you hopefully will never have to experience them firsthand. But it's still important to know what they are just in case.
4. Read the Fine Print
Also read the fine print of any credit card deal. Some cards offer great interest rates, fixed or otherwise, but warn that these low rates disappear as soon as you make one late payment. Credit card companies put this and many other loopholes in their contracts to make the most money off a person with too much debt and too little responsibility. Be aware of them so you can avoid them.
5. Review the Agreement
Once you figure out which card you want and apply for it, you should get the card and the full agreement in the mail. Make sure you review this agreement completely to make sure that you're getting everything you agreed to—the right interest rate, spending allowance, etc. These things can change during the card's approval process.