Getting a credit card is like taking a step toward financial adulthood. It brings you into the world of building credit and paying bills, which almost everyone has to deal with at some point, so it can help to get started as soon as possible.
But the “firsts” of adulthood aren’t always easy, and that includes getting your first credit card. A Credit.com reader recently asked where to start:
Hi, I am 18 years of age, I have no credit history, and I have low income. I’m wanting to get my own place, and would love some help finding a good credit card to build my credit that will accept my low income.
There are three main things that will affect whether or not someone like our commenter could get a credit card: the person’s age, the fact that they have no credit and the amount of money they make.
1. Can You Get a Credit Card at 18?
Let’s start with age. Per the Credit CARD Act of 2009, consumers younger than 21 must have proof of independent income or a co-signer in order to get a credit card. It makes sense: If you’re going to get a credit card, you need to be able to show that you can pay your balance.
2. Do You Make Enough Money?
That brings us to income. Since this commenter referenced wanting to live independently, it seems unlikely that they’d opt for a co-signer. That means this person would need to provide proof of their income. We don’t know exactly what our commenter means by “my low income” — even if it’s not a lot, it isn’t necessarily a credit card deal-breaker. You could always try to ask a credit card issuer what sort of income they’re looking for among card applicants, but you may not get an adequate answer, given that there’s more that goes into getting approved for a credit card than income.
3. What’s Your Credit Like?
This is where credit history comes in. People with no credit don’t have a lot of options, but they can often get secured credit cards (we have an expert guide to secured credit cards you can read here, as well as a review of the best secured credit cards). Just because they’re designed for people with bad or no credit doesn’t mean you’ll get approved, because you still need to show your ability to pay your bills, and you’ll need to make a deposit (which will serve as your credit limit). Generally, that requires having a bank account from which you can make that deposit.
The only way to know for sure what credit card you can get is to apply for it, but you’ll want to do that carefully and sparingly. Each application for new credit can result in a hard inquiry on your credit report (you can read more about hard inquiries and soft inquiries here), so applying for a bunch of credit cards in a short period of time won’t make it any easier for you to get credit.
If you’re rejected for a credit card, the credit card issuer must explain why, and you can use that information to try make improvements to your finances. That way, the next time you apply, you’ll have a better chance of getting approved. After having your credit card application rejected, you may want to wait several months before trying again, so the previous hard inquiry won’t have as negative an affect on your credit. To keep an eye on your credit and how you’re progressing toward building a good credit score, you can get two free credit scores, updated monthly, on Credit.com.
Have questions on credit cards or anything else about personal finance? We’d love to hear from you. You can share your thoughts and questions in the comments section.
More on Credit Cards:
- Credit.com’s Expert Credit Card Shopping Tips
- How to Get a Credit Card With Bad Credit
- An Expert Guide to Credit Cards With Rewards
Image: Rawpixel Ltd