First credit card
What is a good first credit
There are banks
that specialize in extending Visa and MasterCard credit cards
to applicants who are just establishing a credit history. Pick a
bank, and see how you do. Don't apply to more than one because credit
applications show up on your credit report, and multiple rejections
make you look desperate for credit.
If that application doesn't get you a credit
card, there are two basic approaches. The first is to start with
department store credit cards or oil company credit cards and build
a credit history using the cards. These cards are easier to obtain
than Visa or MasterCard charge cards.
Establishing a payment history will help you qualify down the road
for the major credit cards. Apply to one, meaning either a department
store or oil company, and see if you are approved. Wait a few months
before applying for another card.
A second approach is to get a secured
credit card. With a secured card, you place a deposit with the
credit card company and they provide you with a credit card. The
credit limit is typically equal to the deposit. But, be careful
which secured card you choose. Some of these cards carry extremely
high fees -- so high that you could end up spending most of
your deposit in fees.
Carrying a small balance on the department store cards or secured
card isn't a bad idea because it shows that you can handle an outstanding
balance. I don't think it makes as much sense to carry a balance
on an oil company card because it conveys a message that you can't
keep current on your gasoline purchases.
It's critical that you stay current on all of
your bills. Late payments, missed payments or other payment problems
will undo all your efforts to build a credit history to the point
where you have ready access to credit.