How to Get a Credit Card

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If your credit history is next to nonexistent, these tips will help you take charge of your money and prepare you for the world of personal finance.

Step 1: Check with your bank
Check with your bank or credit union to see if they offer a credit card. They are usually more accessible to young people without a credit history.

Tip
Most credit card companies require you to have income and a checking account before issuing a line of credit.

Step 2: Apply for a small loan
Apply for a small loan – less than 500 dollars –from your bank. Pay back the loan the following month to establish a credit history.

Step 3: Ask about a secure card
Ask the credit card company about a secure credit card which requires you to maintain a savings account equal to the amount of your credit line.

Step 4: Apply for a store or gas card
Apply for a department store or gas card to establish credit, but be wary of the high finance charges they carry.

Tip
Make sure that the department store or gas company reports your payment history to the major credit bureaus.

Step 5: Pay bills each month
Pay off the balance of your card each month and never make a late payment which can destroy your credit.

Step 6: Apply for a major credit card
Apply for a major credit card once you establish a credit history and ditch high interest, fee-laden department store and gas cards as soon as possible.

Did You Know?
According to the Federal Reserve, outstanding consumer debt totaled 2.55 trillion dollars in 2009.