Choosing Your First Credit Card

September 27, 2019

I remember getting my first credit card and it was a very exciting day for me. I believe I was 16, and I remember finally feeling like a real adult! There’s nothing better than financial independence. 

 It’s a noble goal to want to have your own money and no longer feel like you have to take money from your family. Having a stable job (even if it’s at a coffee shop or a clothing store) is a mature step to take as you get older. This doesn’t come with some anxiety attached to the excitement. Taking care of your personal finances is only going to get harder as you get older. But, one of the best things to do if you’re over the age of 16 is to get your first credit card. I’m here to help you decide which credit card is right for you!

The first thing you will see changing a lot from card to card is APR: Annual Percentage Rate. This is a fee you will be charged at the end of every month. You can also find your daily APR by dividing it by 365. For example, let’s look at the Capital One Secured MasterCard, an OK starter card. This card has an APR of 26.99%. High, but at least it doesn’t fluctuate much. The daily APR would be.073. After each purchase $.73 cents will be added as interest. At the end of the month you will need to pay $22 of interest. 

Now that you know about APR let’s talk about the different types of credit cards you can apply for. Seeing as this is your first credit card you will want one that doesn’t have fluctuating APR, doesn’t have an annual fee, and doesn’t require a high credit score. I made the mistake by getting three credit cards when I was 18. Being a young entrepreneur is not easy. I always need money because otherwise I won’t be able to afford my expenses or pay people that work for me. Because of that, I jumped at getting the first three cards I got approved for for when in reality they had the highest interest and I made a super dumb choice. The type of card that accommodates not doing what I did is a secured card. A secured card means you put down a cash deposit of between $200-$300. This helps in case anything goes wrong and you are late for a payment. But if nothing goes wrong, you get your money back. It also limits the amount you spend so that you only have the amount of money you want to spend available each month. 

A good card to start with is the CitiBank Secured MasterCard. It has an APR of 24.49%, which means that you will be paying an extra $20 at the end of each month. However, you can avoid interest if you ever need to take out a loan for some reason. With a Citiflex loan you can set up a monthly payment plan to pay off the loan in place of paying your interest. Depending on your situation this could be extremely beneficial. 

Next on my list of good starter cards is the Bank of America Secured Credit card. It has a $300 deposit and APR of 24.99%. This APR adds up to a total of $21 of interest per month. 

The Discover Secured Credit Card also offer an APR of 24.99%, yet it comes with more benefits than the Bank of America Secured Credit Card. You earn 1% cash back on all purchases and 2% in restaurants and gas stations.  At the end of every 3 months you can earn 2% of what you spent back which you can use for a nice night out! 

Students, you are in the unique position of qualifying for a student credit card. This means you can get specialty cards at an excellent deal. For example, the Bank Of America Travel Rewards Credit Card is a great option. It has a fluctuating APR of 16.99% to 24.99%. However, it does have a 0% APR for the first 12 billing cycles. If you spend $1,000 in the first 90 days you will earn a $250 statement which can be used for travel related purchases. That $250 is a plane ticket to a great vacation. 

These are some of the deals and cards I would suggest you look at when starting to build your credit. No annual fees, a card that doesn’t require a high credit score to open, a fixed APR and one with possible deals are solid words to look out for. In order to succeed in business and life you need to have a reliable credit score so it’s never too early to start building it up!

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