First time credit cards are usually the hardest to get because you do not have a credit history established. Without a credit report history, lenders cannot assess risk in extending you credit. However, that does not mean you cannot begin to establish that credit record. You can get a charge account, but there are usually lower limits, higher fees and interest, or requirements for a security deposit. College students may have a slightly easier time obtaining a new credit card because with their education and job potential, potential for being able to repay credit is higher.
Where you apply for credit is another factor. If you have a relationship with a bank or credit union, with checking and/or savings accounts, you may be able to get a credit card from them, or a debit card that looks and acts like a credit card but draws immediate funds from your linked account. If it is a debit card, you can enjoy all the usefulness of a credit card, with no interest and no bills.
A financial institution may offer you a secured credit card. For this, you will need to make a deposit into a special savings account, of a specific sum (e.g. $300), and the lender holds this amount against the possibility that you will not pay the charge amounts. This is a good way to establish a credit history because the secured credit card is treated like a regular card, with monthly reports of payment history. You can only charge up to your secured limit, the amount you maintain on deposit. After you have had this card for a period of time, six to twelve months, you may be able to get an unsecured credit card.
Store and gas station credit cards are another possibility for getting started with your first charge account. Interest rates are higher, up to about 23%, but if you pay your balance in full each month, that is not an issue. Beginning limits are usually $200 to $300, and if you continue to make timely payments, they may raise your limit later on. It is hard to get the first account, but once you have that established, getting another becomes easier if you are responsible with the first one.
Unsecured credit cards are not impossible to get, but with limited or bad credit history, you will encounter much higher interest rates, and annual fees which usually range from $39 to $79. With all credit card accounts, reporting is done to the credit bureau monthly. Late or missed payments, and overlimit charges will be a strike against you, so obtaining future accounts will be difficult or impossible. It also can cause all your credit account interest rates to spike upwards. To establish a good credit history, you need to make timely payments and stay within limits for at least six months.
You may receive zero interest offers, or see advertisements for low or no interest introductory credit cards. These are reserved for persons with excellent credit records. If you apply, you will probably receive an offer for a different higher interest fee card, or a secured credit card.
Another way to get a first credit account is to find a co-signer. This is a good deal for you, but all the risk lands with the co-signer. Co-signing is not recommended. Credit records are linked and the co-signer is at risk of ruining their good credit record if the other person defaults or makes late payments.
