Picking your first credit card

How to start off on the right foot with credit cards

Getting your first credit card is like moving into your first apartment: It's exciting, empowering — and, once you get used to it, pretty underwhelming.

A starter credit card is just that — a start. Used responsibly, it’s a way to build a positive credit history, which will help you with an array of things like getting a better deal on a mortgage or cheaper car insurance.

Here’s what you should look for when making your pick.

1 Ease of approval

When you have a thin credit file and limited income, you’re not likely to qualify for a card packed with benefits. Instead, aim for something more basic.

If you already have a decent credit history— say, from repaying student loans — it’s possible to qualify for a regular “unsecured” credit card that doesn’t require a deposit. To increase your odds of approval, apply through the bank you already use or with a preapproved offer received in the mail.

If you’re in college, look into a student credit card. Don’t have a credit history yet? Consider applying for a secured card, one that requires a cash deposit. Or ask a parent to add you as an authorized user on a card with a history of on-time payments and a balance that’s far below the limit.

2 No annual fees

Avoiding an annual fee on your first credit card is a budget-friendly move that allows you to keep the card open for a long time at no cost. That can bolster your credit scores if you continue to make on-time payments on the account.

3 Useful rewards

Keep in mind that cards with rewards tend to charge higher interest rates. But if you expect to pay your bill in full every month, that shouldn’t be a deal-breaker.

Look for a card that will reward you for the spending you’re already doing, rather than overspending to land a sign-up bonus.

4 Be responsible

Applying for your first credit card is simple, but building a credit history takes more effort. To make sure you keep your credit history in good shape, stay well below your limit. Make your payments in full and on time every month. And if spending starts to creep up, revisit your budget to get back on track.