What to Know Before You Apply for Your First Credit Card

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Once you’ve finally decided to apply for your first credit card and you’ve picked out what you think is the best one for you (there are lots to choose from), it’s time to fill out the application. Applying for your first credit card can be exciting, but a little scary, too. Knowing what to expect can ease some of your anxiety.

You might get denied.

Let’s get the worst out of the way upfront. Without an established credit history, there’s a chance you could get denied, especially if you’re applying for a credit card that’s intended for someone with good or excellent credit.

Students can improve their chances of being approved by applying for a student credit card. If you are denied the credit card issuer will send a letter telling you the specific reasons for the denial. Once you get that letter, use the information to help you apply for a better-fitted credit card next time. For example, a secured credit card is often a good fit for young adults starting out with credit.

You’re basically applying for a loan.

A credit card a type of loan that you can borrow from again and again as long as you pay it back. Despite what you may have thought up to this point, a credit card is not free money. As you take on the responsibility of having a credit card, keep in mind that you have to repay everything you borrow.

They'll as for some personal information.

Credit card issuers use applications to gather the information needed to process your application. For instance, most applications request your social security number and other personal information like your date of birth.

This allows the credit card issuer to confirm your identity and to check your credit with the credit bureaus – who also identify you by social security number.

You should use a physical address where you receive mail.

The address you put on your application is where your actual credit card and statements will come.

Make sure you use a current and accurate address. Note that if you use a post office box in your address, it may delay your application processing because the credit card issuer needs to have a physical address for you.

You’ll need to know your income.

Credit card issuers are required to ask for income to ensure that applicants can repay what they’ve borrowed. If you don’t have enough income, you may have to wait until you get a job or ask a parent or other adult to cosign for you. Your parents income doesn't count unless you're on the account with them and have access to their regular deposit or they give you a regular allowance.

You might not get a decision right away.

Many online and phone credit card applications can be processed within seconds instantly, giving you an approval almost instantly. Sometimes, applications take longer because some human interaction is needed, either to get more information from you or to manually review your application. Don't assume you've been denied just because you didn't get an immediate answer.

You might have a low credit limit.

When you’re first getting started with credit, credit card issuers will often start you out with a small credit limit to minimize their risk.

It’s not a bad thing – you need time to get accustomed to managing a credit card and huge credit limit makes it too easy to get in over your head. Plus, credit limits are often tied to income, so if you're working part-time while attending college, your credit limit may be limited by your earnings.

This card will be part of your credit history.

Credit card issuers report your monthly credit card usage to companies known as credit bureaus, or credit reporting agencies. These bureaus maintain the credit history for every person with a credit card, loan, or other type of credit-based account. Certain credit card mistakes – like late payments and high balances – will show up on your credit report and make it harder to get other credit cards in the future.