A Rite of Passage: When You Apply for a Credit Card
Contributed by Alix Mcmurray
A Rite of Passage: When You Apply for a Credit Card
There's nothing like doing something for the first time, so when you apply for your first credit card, consider the following. It is a rite of passage, a signal to others that you are worth an extension of credit. But as the saying goes, "It takes money to make money." So it is with credit. It takes credit to build credit. So, if you do apply for a credit card for the first time, how do you prove to the world that you're credit worthy?
When You Apply for a Credit Card, Tread Water before You Swim Laps
Start out at the shallow end in the pool of credit. Get a local store card to start, say, at the local store of a major grocery chain. Pay your bills on time. Then you can look into a secured credit card, whereby you put up a deposit at your bank, and the line of credit reflects a proportion of that deposit. Make sure that your bill paying habits are reported to a credit bureau, because this reporting is the route to establishing a credit history.
When you apply for a credit card if you are denied for having insufficient income or time in employment, you can ask someone to be your co-signer. This person should be someone you trust with a good credit history, an older relative for instance. With their credibility to back you up, you can then stand on your own two feet, pay your bills on time, and go solo the next time you apply.
