Choosing Your First Credit Card

Choosing Your First Credit Card is a task not to be taken lightly

So what is credit and why is it important to you? Credit is defined as confidence in a purchaser’s ability and intention to pay, displayed by entrusting the buyer with goods or services without immediate payment. There are so many reasons to think ahead about good credit and bad credit. As well as how they both impact your future. It is good to understand that good credit does not just accumulate magically and you need to pave your own road of credit by making good decisions with money that is lent to you.

How Does Credit Impact You

Credit impacts you in direct and indirect ways in everyday life. It will put limits on most of everything in your life if you have a below average credit score. Alternatively, if you have a positive score then it will open up doors for you to get more money and opportunities at lower interest rates.  

Where you Sleep

When you are looking for an apartment the landlord will most likely check your credit to see if you are a risky bet in order to pay your monthly rent. A bad credit score might get you denied,  pay a higher deposit, or rent in full. As well as many people do not think about this but when you apply for utilities such as electricity, cable, or water; They will do a credit check and make you pay a higher deposit or maybe even deny you.  

Borrowing Money

So you have decided that you like that cherry red sports car or even might want to put a down payment on a house. Well, if you have less than stellar credit then you will be limited to bad lenders and this will give you higher interest rates as well as most likely less money to borrow. Also, if you need a business loan to start your own business then it will be very difficult to attain any money because you will be labeled as a risk.

Mental Health

This is kind of a taboo area but mental health is definitely impacted by good or bad credit. According to the Money and Mental Health Institute, half of people having debt problems have mental health issues. The treatment time for clinical depression can also be 18 months longer for those with money problems and you are 4-6 times more likely to have debt problems if you have mental health issues. It’s basically a cyclical problem with each feeding off the other. More debt can bring mental problems with mental problems bringing more debt.   

Deciding on Your First Card

Now that we have instilled on how important it is to be responsible about your first credit endeavor; You need to start the journey of credit card hunting. However, the first step is to get a full understanding of your own financial background to see what you are eligible for and what  card you would indeed decide upon.  

  • Check your Credit to get an idea of your score or any biases
  • Know what card you are looking for such as good interest rates, rewards, or more for securing good credit
  • Do you want to transfer a balance?
  • Do you want credits or rewards for being a student?
  • Do you travel a lot and want points for flying or hotels?

Once you have an idea of what card you are after then it is best to start comparing the best credit card offers online.