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How do you choose your first credit card?

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Quick Answer

Look for a credit card with a low interest rate and a low-to-medium line of credit when shopping for your first credit card, recommends Mary Ann Campbell for Forbes. Also, choose a credit card with a low annual fee or no annual fee, reports Andrea N. Browne for Kiplinger.

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Full Answer

The bank where you have a checking or savings account or a retailer you use frequently might be willing to issue a credit card even if you have no established credit history. Before you choose a credit card, read the fine print in full, states Browne. Compare all the credit card offers you obtain and pick one that costs the least in terms of annual fees and interest rate.

To avoid the temptation of spending more than you can afford to repay in full, opt for a first credit card with a low-to-medium credit limit and repay the amount owed in full each time it is due, recommends Campbell. This helps you improve your credit rating and qualify for a lower interest card more quickly even as you build safe financial habits. A credit card is a financial tool to help you build a credit history; use it wisely, notes Browne.

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