How to get your first credit card
Credit is very important in the USA. And more in these moments of economic crisis. The entire North American economy revolves around credit. That is why it is very important for young people and for the newly arrived immigrants to find a way to establish a good credit history so that it becomes the foundation of their future projects, whether they are buying a house or a car, financing a university degree , paying bills or meeting emergency obligations.
How to start a credit history
A good way to start a credit history is with a credit card. We know that if you don't have a credit history they will not grant you a credit card and that without a credit card you will never start your credit history. It is the dog that bites its tail. Do not despair, for everything there is a solution. We will design our strategy together and you will see how, in a short time, we will achieve the much desired "plastic".
Tips for getting your first card
Gas stations and department stores are a good place to start. They issue cards more easily and without so many requirements and reports. They will ask you to prove regular income and little else. You can only use them to buy in their establishments and branches and for limited amounts, but they will help you build your credit history. And this is essential to obtain your first credit card.
Of course, you have to take into account some very important warnings:
Take care of your expenses
Pay on time, better if you can do it before the deadline
Don't use all of your credit. I advise you not to exceed 50% of it. And pay a little more than the established minimum.
Make sure these establishments report their reports to the credit bureaus.
After a short time, you will have gotten used to the responsible use of your credit card. Above all you will have learned not to fall into the temptation to abuse it. It is very important that you maintain control over your expenses and that you keep a good account of them. You must be disciplined and know how to say no to some purchases if you cannot meet your payment in the future. Always remember to spend what you can pay later, since any slip you make will be registered in your credit history. And this will accompany you throughout your financial life.
Get a secured or guaranteed credit card
Now we are going to take the big step. I recommend you go to a banking institution, perhaps the one in which you have your savings or checking account can be worth it. And if you don't have an account open in any of them, look for the one that best suits your needs.
There are all kinds of them, look for one that has many branches and that has personalized attention. It is very useful to find out if they have Hispanic staff , since, sometimes, it becomes difficult and complicated to understand some financial terms if we are not very familiar with them.
Once you have chosen the banking institution, you will request a secured or guaranteed credit card. What is this? The secured or guaranteed credit card is a card that is backed by money that you must deposit as a guarantee of payment. This deposit will be frozen and you will not be able to withdraw it until you cancel all the purchases you have made with the card.
Suppose you request a secured or guaranteed credit card for US $ 2,000, then you must deposit US $ 2,000 as collateral. This is: the same amount that you request as a credit on your card, you must guarantee it with an equal or higher deposit. After a while, and after having paid some fees, you will be able to access other limited cards from other banking institutions that will increase your credit limit. And not only that, but also, and more importantly, your credit references will increase in your credit history. Once you've finished paying your bills, you can cancel them and apply for a traditional credit card.
Traditional credit card
At this point, it would be helpful to have a friend or relative who can guarantee your application for a traditional credit card. The banking institution in which you will request your card will carry out an analysis of your payment capacity and will request reports on your credit history. If you have managed your payments well with your previous cards, if you paid your installments on the secured or guaranteed cards on time, you will have no problems obtaining your first traditional credit card.
Remember that when used responsibly, credit cards will help you achieve your personal financial goals and ensure a smooth financial future. On the other hand, a bad use of credit cards will lead you to create difficult debts to pay and bad credit reports that condition your access to credit in the future. The credit card is a loaded weapon , always use it wisely.
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