Guide to applying and getting your first credit card


Guide to applying and getting your first credit card

If you’ve never had a credit card before but would like one, then this guide might help explain how credit cards work and how to go about applying for one. You can only get a credit card if you are eighteen or older, so if you’re seventeen you’ll have to wait until your next birthday, otherwise you’ll be rejected automatically.

Why do people get credit cards?

A credit card can be a useful tool if you use it responsibly and make your payments on time. Having a credit card could help you build and improve your credit rating, providing you maintain your minimum payment on time and stay within your credit limit. Not doing so could harm your credit rating

It can also help you spread the cost of buying items and offer you extra protection on purchases over £100.

Find out what a credit rating is and how to go about checking yours

Improving your credit rating

Using a credit card could help you to build a good credit history, which will come in handy when applying for mortgages, loans and other forms of credit in the future: but only if you make your payments on time and stay within the credit limit that your card provider sets you. It is important that you don’t use a credit card as ‘free money’ – whatever you spend on the card will have to be repaid and, if you don’t clear your balance in full each month, you will generally have to pay interest on the balance too.

You will need to make at least the minimum payment specified by your card provider each month. If you fail to do so, you could damage your credit rating and you will usually incur an extra charge (typically £12) as well. Making just the minimum payment each month is far from ideal, as it could take you years to pay off what you owe. If you can afford to pay more than the minimum then you should, as it should help to clear your balance much quicker. Remember, if you clear your balance in full each month then you won’t usually be charged any interest (the exception is generally any cash withdrawals that you make using your credit card at ATMs, interest is usually charged on these from the day you make the withdrawal).

What lenders like to see on a credit report is that you have used your card responsibly over a number of months and made the repayments due on time.  If you can build up a track record of doing this it could help any future applications for credit that you make.

How to apply successfully

There are so many different credit cards available that it can be hard to decide which one to go for. You may wish to apply for a credit card that offers a 0% introductory periods for purchases, so you won’t occur interest for the time stated. Or you may wish to get a card which offers cashback on a percentage of your spend or donates a certain percentage to charity.

Whether you’ll be able to get the type of card that you want is not for certain, as lenders have a strict criteria on who they will and won’t lend to. Read the website or brochure for each card that you are interested in carefully – they often specify details such as a minimum salary that applicants must have. 

If you haven’t borrowed money in the past you may find that because you haven’t built much of a credit report, you can’t get the card that you want. This doesn’t mean that you won’t be able to get any credit card – there are cards specifically designed for people with little credit history – such as Ocean’s credit builder card.

It is important that you don’t apply for numerous cards at once, as this will show on your credit report and could put lenders off. One thing that you don’t want a lender to think is that you’re desperate for money.

Often, people who are applying for their first credit card find that their bank are more willing to give them a credit card than other lenders because they can access their bank records. However, if you live in your overdraft and haven’t managed your current account, this could count against you.

Before you apply for any credit card, use a tool such as Money Saving Expert’s free eligibility calculator as it will give you a good indication of which cards you are most likely to be accepted for, as well as the best deals on offer. It performs a soft search on your credit file so you’ll be able to see it if you check your credit file but lenders won’t.