Best First Time Credit Cards
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If this is your first time credit card, it is a good possibility that you are either a young adult moving out on your own for the first time or are a university student. It is finally nice to get your own card, but it can be a little confusing as to which one you should get. Because there are a myriad of credit card types, how are you to choose the best one for your particular situation? This article will introduce the four different types of cards so you are able to make an informed decision on what’s best for you.
Let’s start with the standard credit card type. Most of you have seen these types of cards in your parent’s possession. The more familiar names of this credit card type are MasterCard, Visa, American Express, Discover and Capitol One. When you get one of these credit cards it is similar to receiving a small loan. Each time you make a purchase with these cards you are making a charge against your account. You are essentially borrowing money and paying interest on the use of the money until you pay off the charges. These are good cards to own if you are a responsible person who doesn’t overspend what you can pay back in monthly installments. The advantage of one of these as a best first time credit card is that you can begin to build a good credit score with responsible use.
A debit credit card is another often used type of card. It is directly connected to your checking account so you only have access to as much credit as you have money in your account. This is a good credit card for someone who is not good at managing money or has trouble making timely monthly credit payments. However, the one disadvantage to this type of card is that it does nothing to build your credit history.
For those individuals who have bad credit histories, secured credit cards are a good choice and often these are the only cards they are able to get. These types of credit cards are named “secure” because they are backed by a deposit to the credit company of cash and the resultant credit limit is the amount of money deposited. One advantage to a secure credit card is that it does count as a means to rebuild a poor credit history.
The final credit card type is pre-paid card. It is similar to the secured card because you can only spend the dollar amount of funds you have paid into the card. An advantage here is that since you have already pre-paid your card you can never be late on monthly payments because you have none. This is an excellent card for a teenager who will have some of the freedom in using a credit card but without the major financial responsibility.
You should find it easier to choose the best first time credit card now that you have some idea of the advantages and disadvantages of the different types of cards. Only you know your spending habits and responsibility level. Remember to keep that in mind when choosing the card that is best for you.
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