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Getting your first credit card can be challenging. There are some important things you need to know before you apply. You need to build up your credit first, keep an eye on your balances, and limit the number of new cards you open. In addition, you should keep track of your credit score.
Building credit before applying for a credit card
Before applying for a credit card for the first time, it’s essential to build up your credit history. Credit card issuers report all account activity to the three major credit bureaus – Equifax, TransUnion, and Experian. The bureaus use this information to create credit reports and scores. You can begin building your credit by opening your own credit card or becoming an authorized user on another person’s card.
First, check your current credit report to see if there are any errors or mistakes. If you do, try to get a secured credit card from a bank or add yourself as an authorized user on someone else’s card. It’s also a good idea to avoid letting your credit utilization ratio reach too high.
Limiting the number of new cards you open
Some credit card companies limit the number of new cards you can open, while others don’t. For example, Chase doesn’t accept new applications from people with five or more credit card accounts within 24 months. If you have a good credit history, you may be able to get away with fewer new cards, but there are still some important things you should know when applying for a credit card.
The best way to protect your credit score from too many applications is to wait at least three months between each application. This will protect your credit score from the negative effects of too many inquiries and will help you avoid a ban on your credit score. It will also prevent you from falling foul of a credit card company’s restrictions, such as applying for more than one card within three or six months.
Keeping an eye on your credit scores
Keeping an eye on your credit scores is extremely important for many reasons. Credit scores can affect everything from interest rates on loans to utility deposits. It is also an important factor in home buying decisions. The major credit scoring companies all use different approaches to calculate credit scores, but all agree that two factors are especially important: payment history and credit utilization. These two factors make up more than half of your credit score. This means that you should focus on improving these two aspects of your score.
Another important factor to consider when applying for a new credit card is preventing fraudulent activity. Incorrect information or fraud on your credit reports can lower your credit score. Make sure that you dispute any inaccurate information that shows up on your credit report. A successful dispute can result in your credit score being raised.
Avoiding fees
When applying for a new credit card, there are many things to keep in mind to avoid paying fees. These fees can add up over time and cost hundreds of dollars. For example, many credit cards charge an annual fee, which can run anywhere from $95 to $500. While most credit cards charge the same fee every year, some credit cards waive this fee for the first year.
Another fee you should avoid is the returned payment fee, which is charged when the credit card company is unable to process the payment. Generally, you can avoid paying a returned payment fee by putting money in your account before making a payment. You should also be aware of foreign transaction fees, which can range from 1% to 3%. If you want to avoid these fees, try to find a card that doesn’t charge foreign transaction fees.
Setting up automatic payments
Setting up automatic payments on your credit card can save you from over-drawing your account and paying high interest rates. It is also more convenient than making a manual transfer of funds to your credit card. By avoiding the hassle of transferring funds manually, you can pay your bill on time, without thinking about it.
Most banks offer this service. To set up this feature, you must have an online account that allows you to set up automatic payments. Then, you should link your bank account and routing number. Once you’ve linked your bank account and set up your payments, you should be able to set up automatic payments on your credit card.
