How Old Should I Be Before I Get My First Credit Card?

For many their first credit card is seen as a rite of passage into adulthood. A few years ago, college freshman’s mailboxes were full of credit card offers, trying to entice college students to open an account with them. Now it has become more difficult for people to open an account, and they must provide proof of income to qualify for an account without a cosigner. The Credit Card Act made it more difficult to take out a credit card account. Age is not necessarily as important as considering whether or not you are now financially responsible enough to have one. Before you open a credit card account, ask yourself these questions.

Do I Have a Regular Income?

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Instead of age, it is more important to look at your current financial status. If you have a steady job, and a way to pay off the credit card each month, then you may consider getting a small credit card. If you are currently not working, you really should not apply for a credit card. You are responsible for paying back the money that you owe on the credit card. It is important that you have an established work history before you take out a credit card, even one with a low credit limit.

Can I Pay Off My Balance Each Month?

The next question you need to determine is whether or not you will be able to pay off the balance each month. If you can find money in your budget to cover your credit card balance each month, you should be okay with having a credit card available to you. As you use your credit card, you need to understand the risks and responsibilities associated with having a credit card. When you do not pay it off each month, you are going to end up paying a lot in interest over time. Keeping a lower available credit balance can also help you effectively manage your credit and to help prevent you from running up balances that are difficult to pay off.

Why Do I Want a Credit Card?

It is also important to understand why you want a credit card. If you want a credit card to help you build your credit, you will use it differently then if you are looking at a credit card as a way to cover the gaps in your budget. In fact, if you are having a difficult time paying your monthly bills, you should avoid using a credit card at all, because it will only make the problem worse over time, as your minimum monthly balance payment goes up each month. If you want your credit card to help you handle emergencies, you should work on saving up an emergency fund to do the same thing. This will protect you from needing to use the card, and give you the money you need to pay the card off in full after the emergency.

What Happens If I Don't Pay Off My Balance?

It is also important for you to fully understand what happens if you fail to pay off your balance each month. Most of your payment each month will go towards interest charges, which makes it difficult to pay off your account unless you are paying additional money on your balance each month. You need to be fully aware of the dangers that come from having a credit card before you sign up for one. If you do decide to take out a credit, you will need to read your statement each month to track the amount you are paying in interest and to figure out how quickly you can work to pay off the credit card. You need to be careful or you will fall into the credit card trap. Make sure you handle your credit card wisely. 

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