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How to get your first credit card

If you’ve never had a credit card before, knowing how to get one can be tricky.

To help you get started, we explain what you need to know and things to consider when choosing your first credit card. 

Should you get a credit card?

When deciding if a credit card is right for you, it’s important to understand how credit cards work. You may want to think about your spending habits and how you’ll use it. 

It can be tempting to overspend on a credit card but, remember, anything you spend on a credit card must be paid back. And you may be charged interest on purchases if you don’t repay the balance in full each month. If you use a credit card in other ways, such as withdrawing cash or a balance transfer, you’re likely to have to pay interest even if your monthly balance is repaid.    

If used sensibly, a credit card can:

  • help you manage your spending between pay days

  • help you spread the cost of expensive purchases

  • be a useful tool for building your credit history

  • protect the things you buy under Section 75 of the Consumer Credit Act 1974

How to choose your first credit card

When you apply for a credit card, a lender will look at your credit score to see how responsible you are at borrowing and repaying money. They’ll use this to help them decide whether to accept your application.  

If you’re new to borrowing, you may not have a credit score. Without a credit history, you may be limited in your choice of credit cards but you can still find ones to suit your needs.

Credit builder credit cards

A credit builder credit card can be a good option for your first credit card if you’re looking to build up, or improve your credit score. 

Credit builder credit cards tend to have higher interest rates than other types of credit cards. You can avoid paying interest on purchases by repaying your credit card balance in full, each month. 

By spending within your credit limit and meeting your monthly repayments, you can gradually improve your credit score. Failure to do so can have the opposite effect and harm your credit score. 

Other types of credit cards

If you have a good credit score, you may consider a different type of card. The right type of credit card for you will depend on how you’d like to use it. For example:

  • reward credit cards allow you to earn reward points as you spend, which can be redeemed for things like shopping vouchers or frequent flyer miles

  • 0% purchase credit cards are useful if you plan to buy an expensive item upfront and spread the cost over a period of time

  • balance transfer credit cards let you move existing debt from one or more credit cards to another credit card provider

What to look for when comparing credit cards

Lenders are required to display certain credit card terms, before you take out a credit card. It’s important to check these details and understand what they mean. Things to consider include:

Interest rate

On most cards, you can avoid paying interest on purchases if you repay the balance in full each month. Some credit cards offer a 0% interest rate on certain types of transactions for a set period.

Annual Percentage Rate (APR)

The APR can give you an idea of how much a credit card could potentially cost you over a year. It takes into account interest rates for purchases as well as fees or charges you may have to pay.

Credit limit

The credit limit on a credit card is the maximum amount you can borrow on that card at any one time. It is set by the lender, based on how much they feel you can afford to borrow.

Minimum repayment

This is the smallest amount you must pay back each month to avoid late fees and charges.

Fees and charges

Some credit cards charge an annual fee. You could also be charged a fee if you go over your credit limit, or make a late payment. This could harm your chances of getting credit in the future.

How to apply for your first credit card

Eligibility requirements can vary, depending on the type of credit card you want to apply for. 

To apply for a credit card, you need to be over 18 and a UK resident. You may also need to have a regular income, over a certain amount.  

Once you’ve decided on the right credit card for you, it’s important to become familiar with the terms and conditions and eligibility criteria. If your application is declined, it can harm your credit score. 

Most credit card providers allow you to apply online or through a mobile banking app.