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How to choose your first credit card

Do your research before applying for your first credit card

Credit cards for beginners – let’s get you started

If you’ve never had one before and you’re wondering how to get a credit card that’s great for beginners, our guide can help. Choosing your first credit card ever should always involve research to make sure you get the right card for you, and the best deal possible. So, where to start? 

Do I need a credit card?  

Why get a credit card if you’re managing fine without one? It’s a fair question and it’s important that you think carefully about when to get your first-time credit card and how to use it. Is it the right solution for you, and are you ready? 

A key thing to bear in mind is that you should try to pay your bill off in full every month, if possible – or at least be careful about how much you spend. Credit cards can be a great way to cover everyday expenses and bigger buys in the short term, but the interest can start to add up if you carry significant debt over from month to month.

Having said that, if you use your first credit card responsibly, it can be a helpful financial tool to have. Here are some of benefits you can get from a credit card:  

  • It can help cover everyday expenses if you find yourself a little bit short one month. 
  • You could use it to spread out the costs of bigger expenses, like holiday flights or a new piece of furniture – but keep an eye on that interest. 
  • Using a credit card responsibly could help you build up your credit score and improve your credit report

Another factor to consider is that when you buy something with a credit card, you are protected under Section 75 of the Consumer Credit Act

Are you eligible for your first credit card? 

Before applying for your first ever credit card, try to work out how likely it is that you’ll be given one. Card providers check a range of information when they consider applications and what terms they might be prepared to offer. Core criteria will typically include: 

  • Your age – you’ll need to be at least 18 years old (potentially older for some lenders).
  • Your address – to get a first-time credit card you’ll likely be asked for proof of a permanent UK address.  
  • Your income – you might have to show a lender you’re in full-time employment or earn a certain amount annually. 
  • Your finances – things like bankruptcies, debt or having applied for credit in the last month can all work against your starter credit card application. 

You can also use a credit card eligibility checker to find out if you stand a good chance of qualifying. 

Choosing a credit card that’s good for beginners

When it comes to the best choice for first-time credit cards, it will depend a bit on your circumstances and how you intend to use the card. 

There are many different types of cards you can apply for, but if it’s your first credit card you might struggle to get the best deals on the market. That means it’s even more important to shop around before you apply. 

What is a first-time credit card? 

In the UK, first-time or starter credit cards – also sometimes referred to as credit builder cards – are generally designed for people with poor credit scores or little credit history, often specifically targeting young adults and students. 

They can be less strict in terms of eligibility criteria, like your employment status or annual income, meaning they’re often be a good option for credit card beginners. 

On the flipside, they typically offer less generous terms – meaning they might have a lower credit limit and higher interest rates. 

So, if you already have a healthy UK credit history, applying for a starter credit card might not be the best call for you. 

Getting the best deal on your first-time credit card 

There’s not necessarily going to be any one best choice for all first-time credit card users. There are many different factors to take into account – we’ve listed some things to consider below.

Annual fees and charges 

When researching the best first-time credit card offer for you, bear in mind that some UK cards have an annual fee, so you might want to look specifically for one with no fee.

Cards that charge an annual fee will generally add it to your balance every year – which means it might accrue interest if it’s not paid. There will most likely be other charges to watch out for as well. These could include late payment fees if you don’t pay at least the minimum monthly amount when it’s due, or charges for going over your credit limit. 

APR – Annual Percentage Rate

The APR is the annual interest rate you’ll be charged if you don’t pay your credit card bill in full each month, incorporating any additional charges and fees. Make sure you check the APR you’re offered if your application is successful, as it could be higher than the advertised rate. To find out more, have a look at our guide to APR. 

Introductory interest rates 

Many credit cards offer a lower – or no – interest rate for an initial period. Using this type of introductory offer can be a good way to manage the cost of a big purchase (or a balance transfer, for people who already have a credit card), as long as you pay your balance in full before the interest rate goes up. Check to see which cards offer the lowest rates, and for how long. Also remember to check what the rate will go up to once the introductory period ends.

Minimum repayment amount

This is the minimum amount you have to pay back monthly, if you have an outstanding balance on your credit card. It’s typically 1-3% of the balance you owe, or a fixed fee of around £5, whichever is higher. 

Loyalty points, rewards and cash back 

As mentioned above, you could earn rewards when you spend on some credit cards, including loyalty points that can be used to shop in certain stores. Credit cards that offer a cashback reward will refund money when you spend certain amounts – provided you qualify for cashback.

Applying for your first credit card ever

You’ll be able apply for your first credit card online with most banks and other suppliers, and it’s usually a fairly quick and easy process. 

You’ll need to have some personal information to hand though, such as your contact details, address history for at least the last three years, employment status and how long you’ve been with your bank for. 

The credit card provider will check your credit report as part of the application. This will help them decide if they’re prepared to give you a card and what terms to offer. 

Have a look at our guide on how to apply for a credit card, for more information. 

What happens if my first credit card application is denied? 

A failed credit card application isn’t the end of the world, and your credit report won’t say that you were unsuccessful. However, it will show the number of times you’ve applied for credit – and repeated applications could impact your credit score negatively. 

So, it’s a good idea to try and figure out if there are any obvious reasons why your application was denied before you try again. This could include things like not being listed on the electoral register, or incorrect information in your credit report. 

Credit card providers should tell you which credit reference agency they use. It’s worth checking your credit report with the relevant agency for any obvious issues, and considering ways you could improve your credit score

How to use your first credit card responsibly 

Once you have your first credit card, it can be tempting to hit the shops and splurge. But bear in mind that even small purchases can add up to big debt if you don’t keep a close eye on your spending. 

Here are some tips for beginners on using your credit card responsibly: 

  • Try to make sure you can pay your bills in full and on time every month – or before any interest-free introductory period runs out. 
  • Don’t go over your credit limit and incur penalty fees. In fact, it’s a good idea to try not to spend more than 30% of your card limit, as maxing out your card (or spending most of your available credit) could damage your credit score. 
  • Don’t take out cash with your credit card if you can avoid it, as you’ll likely be charged a withdrawal fee and interest – even if you pay your monthly bill on time. 
  • Keep track of what you spend and any fees or charges, which could include late payment fees and charges for using your card abroad. Even if you can’t pay your full bill each month, try to pay more than the minimum amount to reduce interest. 
  • Check your credit card bill regularly to make sure all the charges look right and there is no suspicious activity on your statement. Take a look at our guide to credit card security for more information on keeping your card safe.

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Have any questions?

Our credit cards support section is usually a good place to start – it covers a vast range of FAQs and other relevant information. Or just get in touch with us if you prefer.