If you are looking to build credit, opening a credit card account is a great way to get started.
There are many kinds of credit cards available, like ones for student and businesses. When choosing your first card, there are many things to consider, such as the APR of the card, or the annual percentage rate. This is the amount of interest that will be charged to your account every month if you do not pay off your balance. You want to try to find a card with a low, fixed APR.
Some cards also charge maintenance fees, require a minimum number of transactions, or have strict balance limits. You will have to fill out an application for the card you want, and wait for approval. If you are approved, your new card may even let you transfer over old balances.
If you are denied a credit card, you could also consider getting a prepaid card, which works like a debit card. You pay to transfer money from your bank to the card, and then use the card for online shopping, hotels, home repairs or whatever you need. Unfortunately, these prepaid plans rarely come with the rewards many other plans come with, such as cash back or airline miles.
You want to be very careful that you do not spend outside of your means though, or you could end up in serious debt. If you find yourself in financial trouble, you can get help from the National Foundation for Credit Counseling, which may provide you with debt consolidation services to make what you owe more manageable.
Credit cards can be a huge help, but it may be hard to find one with zero interest if you have no credit or a bad credit history. Visa, MasterCard, Discover, and American Express are common credit cards and are accepted at the most retailers. When shopping for a new credit card there are a few things to keep in mind. You will want to decide if you will be making balance transfers from your bank account to your credit card. Many credit cards allow you to do this online or over the phone. You will also want to take into consideration having a prepaid credit card. This may be best for students or for those with bad credit. Instant approval is granted with some plans, but the balance may not be as high as others. You will want to shop interest rates and rewards that are offered before taking out an application. Business credit cards will have higher limits, which is the same for those with excellent and good credit. Before taking out a credit card, try and find one available to you with zero interest. Obviously this can save you money. Instant approval is convenient and great for those who may need money quickly. Students who want to be able to transfer money or pay bills online will find some cards allow this, while others don't. Once your credit history is built, you will have more options and a less expensive interest rate. It's still important not to spend more money than you have or else you could get yourself in troubling debt.