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Is it time for you to open your first credit card? We’ve got a list of questions to help you decide.

If you’re not sure whether opening a credit card is right for you, you’re not alone. You’ve probably heard that credit cards come with benefits such as consumer protection or cash-back rewards — but you’ve probably also heard that if you’re not careful, misusing credit cards can land you in serious debt.

Let’s get that out of the way first. Yes, putting purchases on a credit card that you can’t pay off can lead to a costly debt problem. However, many people pay off their credit card bills in full every month, meaning that they they can avoid unpaid debt and high APR (Annual Percentage Rate) interest on their purchases.. Other people carry the occasional credit card balance but regularly pay off the card in full and avoid falling into debt. If you keep track of your purchases, avoid spending more than you earn, and pay off your entire credit card balance as often as possible, you shouldn’t have to worry about credit card debt.

Plus, there are plenty of valid reasons to open a credit card. If you’re wondering whether it’s time to take the plunge and open your first card, consider these questions:

What’s your credit history?

Your credit history plays an essential part in your financial life. Lenders check your credit history before issuing mortgages or car loans, landlords check your credit history before agreeing to rent you an apartment, and some employers even check your credit history before offering you a job.

What is a credit history? Exactly what it sounds like: a history of the way you have managed credit in the past. Opening a credit card and using it responsibly — making on-time payments, avoiding large balances, etc. — is a great way to boost your credit history and your credit score. In return, you’ll have more credit opportunities available to you: better credit cards with higher rewards; lower interest rates on mortgages and loans. It might even help you get that job offer you’ve been hoping for.

Are you planning to travel?

If travel — especially overseas travel — is in your future, a good credit card can save you a lot of money. The best travel credit cards not only help you earn rewards that can be used to offset the cost of airfare, hotels, and more, they also come with travel-friendly perks such as airport lounge access or free checked bags. Some cards even cover the cost of your TSA Precheck application.

Each travel credit card offers a different set of rewards and perks, so check out the available options and decide which card is best for you. If you’re traveling abroad, for example, you’re going to want a travel credit card that doesn’t charge fees for foreign transactions. Use our guide to choosing your first travel credit card to help you get started.

Would you like to earn rewards with your purchases?

Travel credit cards aren’t the only credit cards that come with rewards and perks. Many credit cards offer cash back, statement credits, gift cards, and more. The more purchases you make with your credit card, the more rewards you can earn.

Credit card reward offers can feel a little overwhelming, so use our list of the best rewards credit cards to narrow down your options. You’ll also want to read our guide to flat-rate vs. bonus category rewards to learn a little more about the two major types of rewards credit cards offer. With a flat-rate card, you earn the same rewards rate on every purchase; with a bonus category card, some spending categories earn higher rates than others. There are bonus category cards for people who want extra cash back on groceries, restaurants, gas stations, and more. When you choose a bonus category credit card, make sure the categories match up with the kind of purchases you tend to make.

However, don’t let the lure of rewards cause you to put more money on your credit card than you can afford to pay off. As with all aspects of credit card spending, earn your rewards responsibly.

Do you earn irregular income?

Some people get the same paycheck deposited into their bank account every two weeks. Other people, such as hourly workers and freelancers, might get one large paycheck followed by a few smaller ones — in other words, irregular income.

If your income is irregular, a credit card can provide an effective way to keep your expenses covered while you wait for that next big paycheck to hit your checking account. Make a budget to ensure you don’t put more money on your credit card than you can pay off, and try to manage your bill-paying schedule so that you have enough money to cover your credit card bill by the due date. Of course, don’t forget your other bills either.

Do you need to fund a large purchase?

In most cases, the standard credit card advice is to never carry a balance you can’t pay off in full that month. That way, you won’t have to face high APR on your outstanding balance. Since many credit cards charge between 17% and 25% APR, you want to avoid paying credit card interest whenever possible.

However, some credit cards come with 0% APR intro rates. These cards waive interest for a limited amount of time (generally between 9 and 18 months, depending on the card). If you need to cover the cost of an upcoming trip or an unexpected expense and would like to avoid high APR temporarily, a 0% interest credit card could be one way to solve the problem. Just make sure you can pay off the bill in full before the interest-free period runs out!

Check out our list of the best 0% interest credit cards to learn more — and use our guide on when to use a credit card to fund a large purchase to decide whether this is the right choice for you.

Are you a freelancer or a small business owner?

Freelancers and small business owners can take advantage of business credit cards, which provide a slew of benefits including the ability to track business expenses, the ability to earn rewards on business expenses, and the ability to start building credit for your business (which is essential if you ever want a small business loan).

Business credit cards also help freelancers and small business owners keep business and personal expenses separate, which will make things a lot easier come tax time. If you’re self-employed or running your own business, a business credit card is a must.

Credit cards are part of a full financial life

Opening your first credit card, whether you’re hoping to build a credit history or planning a big overseas trip, is a personal finance rite of passage — and like any rite of passage, it might make you feel a little nervous. Don’t worry. As long as you use the card responsibly and don’t make purchases you can’t pay off, you’ll be fine. After a few months with the card, you’ll wonder why you put it off for so long.


Editorial disclosure: All reviews are prepared by staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including card rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the bank’s website for the most current information.