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Building credit is a curious process. To be approved for a most credit cards you really need to have an established credit history already in place. For young adults or people who just never had a need to borrow money, trying to get their first credit card is going to result in a lot of denials. In short, establishing or re-establishing your credit depends on what type of credit you can be approved for and how well you maintain it.
Here’s a guide that will help you to qualify for the best credit cards with minimum approval requirements so you can establish yourself as a responsible borrower.
Secured credit cards and limitations
Normally, when you are approved for a credit card, you are outright given a credit limit. This is the total amount of money that you can spend without being penalised or charged over-the-limit fees, but there’s a catch. Each month there is a minimum credit card payment due. You also get charged interest on your total amount of purchases.
Secured credit cards require cardholders to send the issuer a deposit that is equivalent to their credit card limits. This protects the card issuer and helps you to establish credit at the same time. The best credit cards for people building credit are those that can shield you from falling into a pit of debt.
Why get department store credit cards?
One type of credit card for which you should pretty easily be approved is the kind offered by department stores. These branded credit cards are issued specifically for use at only approved stores, so consumers are thought to be more careful about their purchases. Many people who don’t have established credit are approved for department store credit cards as a means of getting their numbers up. Department store credit cards don’t have too many requirements for applicants, so if you can prove you have a job and are established in all the important areas of your life, you should get an approval.
Seeking credit cards geared towards younger people
Although you need to be at least 18 years of age to qualify for your own credit card account, there are many cards that are marketed toward those who don’t have much of a credit history. Specifically, college students and even young business owners may find that it is easiest to get approved for credit cards that have lower credit limits and higher interest rates. After maintaining one of these credit cards for a year, you may request credit limit increases as well as interest rate reductions.
Establishing credit is a process, not a single act. The more actions that you take, the better your credit rating will be. See what credit cards you can get approved for at first and use them responsibly to understand how minimum payments work as well as find out how much debt you can afford to accumulate. No matter what kind of credit card you get qualified for, you don’t have to pay much in interest as long as you don’t carry a large balance.
