What to Look For in a Starter Credit Card
Building credit from nothing can be confusing. In order to get credit you need to have credit, but you can’t get credit without having credit. It’s a loop that people new to credit can find difficult to navigate. This is why starter credit cards have been implemented into banks and other lenders. Your first step into the world of credit cards may very well be a scary step to make, but knowing what to look for in a starter credit card can help. Here are a few things to look for in a starter credit card.
A Low Balance
Having a low balance on your first credit card works better in your favor. It’ll limit the amount of purchases you can make on your credit so you don’t go overboard. Let’s face it, it’s way worse to max out a $2000 card than a $200 card. Learning how to handle a card with a low balance can prepare you for handling large loans or credit limit increases.
A Suitable Interest Rate
While a starter credit card is generally for an individual who lacks credit standing, it’s still possible to obtain a fair interest rate. The higher your credit climbs, the lower the interest rate will be on your next credit items. The lower your credit drops, the higher the interest rate you’ll be forced to accept to take out a credit card.
A Credit Reporting System
People are becoming more sensitive to their credit ratings, so more credit lenders are providing a glimpse into your credit rating through your credit card. Whether online through a website or on a mobile app, just being a card member will allow you to constantly check your credit score without damaging it.
A Secured Balance
Having a secured balance will help to alleviate some of the fear you may feel from having a starter credit card. Not only will a secured credit card put you more at ease, it’ll also put lenders at ease when lending to you. It’s the equivalent of paying to own a credit card. Instead of getting a credit card based solely on credit, you put a deposit down to ensure the credit used can be paid for.
Having these attributes in a starter credit card can keep your credit safe while you get used to using a credit card.