The Credit Card Act of 2009 made credit cards very tough to obtain for students. Requirements for credit card approval have been tightened, and now young people face serious obstacles when applying for a credit card.
Nevertheless, if you feel ready to start building credit history and apply for your first credit card, we have some important tips to find a credit card that fits your needs.
Your age matters
Typically, credit card issuers have very strict requirements for persons under 21. You must be full-time employee to obtain credit card when you are younger than 21. If you don’t have a job, credit card is unreachable for you.
However, you still can get one if you have a part-time job. Having a part-time job allows you to be approved for a credit card with the help of co-signer: ask your parents or any other adult who really trusts you to co-sign a credit card application.
When you reach the age of 21, requirements for credit card issuance drop significantly. Full-time job for sure won’t be required anymore, and you can apply for credit card even if you work part-time.
Credit history matters
The bad news are that even if you are older than 21 and have a full-time job, the absence of credit history is a serious obstacle to be approved for a credit card. The good news are that it’s not a reason to panic: just use one of the following tips to obtain your first credit card.
- Find a co-signer. You still can ask your parents (or someone who trusts you) to co-sign your credit card application. Their credit history and income will determine your eligibility to get a credit card. Use credit card responsibly because if you abuse your credit line usage, it damages credit history of your co-signer.
- Get an authorized card. Authorized card is in a way similar to co-signing of credit card application. When becoming an authorized user, you get your own credit card, but your credit limit is tied to credit line of another person. Your credit score will raise if this person is a smart and responsible borrower, but it works vice versa: your bad credit behavior will damage credit history of the person who authorized you for his or her credit line.
- Apply for a secured card. Secured credit card is a credit card that requires a deposit. Deposit amount determines your credit limit. Don’t spend too much money with secured card, pay off your credit card bill each month, and your credit score will raise. Once you reach a certain credit score (at least 650), most card issuers allow you to convert a secured card to an unsecured with no deposit requirement and higher credit limit.
- Rent an apartment. Instead of living on university campus, you may move into your first rental apartment. Find a nice landlord and ask him to report your rent payments to one of the credit bureaus. It won’t raise your credit score significantly, but at least you will get a credit file. Don’t forget to pay your rent on time!
That’s all worth the efforts
Some of the described ways to get your first credit card might seem too hard, expensive or even confusing, but a good credit history established at the young age will make your life easier once you graduate and get the job. Just imagine: good credit score paves the way to easier access to any kind of insurance, some kind of jobs and apartment rent in certain areas. What is more, providers of utility services often pay attention to your credit score. In view of this, take your credit history as serious as your GPA and start building credit as early as you can.