First Credit Card

Getting a First Credit Card: Things to Remember (Kredittkort Test)

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It would be best to remember that getting a first credit card is not simple, mainly because it is a significant adjustment and change. Although you may understand how credit cards function, you should remember some things to help you be as responsible as possible. 

The main problem lies in detail because you must understand the details before deciding anything. This will ultimately help you save money and boost your credit score. It would be best if you stayed with us to learn more about this topic. 

1. Best Cards are Not for First-Time Users

You cannot qualify for the best credit cards available since you will be a first-time credit user or borrower. We are talking about the ones that feature amazing sign-up bonuses, rewards, benefits, zero-percent interest periods, etc. The best way to learn more about credit cards is by checking here for additional information. 

These products are specifically created for people with good to exceptional credit scores, which should be seven hundred points or higher. They require longer credit histories and must also meet income requirements. 

Therefore, starting with something you can handle for the first time is crucial. You can find different products specifically created for people with no or limited credit history. For instance, student credit cards may have specific rewards that will offer you peace of mind. 

2. Security Deposit

People wishing to ensure approval for their first credit card should try to get a secured option first. This will allow them to boost their score and history as time passes. Secured credit cards are perfect for people with no credit histories or damaged scores. 

To open an account, you must make a specific cash deposit that will act as a credit limit. Everything depends on your specific needs, but the minimal deposit requirement is between two hundred and five hundred dollars. Most secured cards will allow you to deposit more to ensure a higher credit limit. 

Of course, if you default on payments, you can lose the amount you invested as a deposit. Still, we recommend you make regular and on-time payments, stay significantly below your limit for a low utilization ratio, and continue with that practice for months. As a result, you can establish a proper credit that will provide you peace of mind.

After regular payments, which will be directly reported to credit bureaus for making history and score, your provider may allow you to apply for an unsecured option. When you close a secured account, the provider will refund your deposit. 

Secured credit cards are different from debit cards because, with debit cards, you must load money and use it to buy certain things. The retailer will take money out of your balance when you purchase something. 

When you have a secured credit card, a deposit protects a lender if you default. However, you will still borrow and return money before the due to prevent interest from affecting your outstanding balance. Each time you make an on-time payment, a provider will report the activity to the bureau, directly boosting your score. 

3. First Cards Can Help You Build or Ruin Your Score

One of the biggest reasons for getting a credit card is to boost your score, which will ultimately help you obtain more essential loans. However, you must be responsible and careful because a lack of responsibility can severely affect your history. Everything depends on your spending habits.

After each payment, your provider will report your activities to credit bureaus, companies that directly create reports that act as a basis for your scores. The reported information will feature whether you made on-time payments and how much available credit you use each month. 

Maxing out the card and making late payments are wrong for your credit score. If you wish to boost your score as much as possible, we recommend that you pay for everything entirely and on time every month. At the same time, you should stay below the limit. It would help if you kept the balance below thirty percent of the limit. 

4. Check Out Fees and Rates Beforehand

It is vital to remember that credit card providers must publicly provide you with relevant fees and terms regarding a credit card you wish to use. The most critical factors are annual percentage rates, which include all fees and rates. You should remember this before making up your mind. 

Each provider features a table on the application page if you are applying online, or you will get it on paper if you wish to get it in person. You should know that the box or table must feature the following terms and fees:

  • The annual fee, or what your cardholder will charge you for keeping your credit card. We recommend you find one that does not come with an annual fee, mainly because the longer you have a credit card, the better your credit history will be, directly affecting your score and ability to borrow more significant amounts in the future. 
  • The annual percentage rate is the interest rate you will pay on the outstanding balance if you carry from one billing cycle to another. Some cards charge different rates for balance options, including balance transfers, purchases, and cash advances. Some cards come with a penalty fee, meaning you will pay late payments if you do not handle at least the minimum amount each month.
  • A foreign transaction fee is the amount you must pay for each purchase outside your native country. In most cases, you must pay between one and three percent, depending on the provider and other factors. 
  • Late fees are charged when you transfer the balance from one month to another. Even if you transfer a specific amount, you must pay the minimum to prevent a late fee from accruing your balance. 

Of course, you will get specific information only after conducting a regular application. For instance, you cannot get the credit limit before approval, which is vital to remember. Visit this site: www.kredittkortinfo.no to learn more about getting a new card that fits your needs. 

At the same time, you should remember that you can avoid specific credit card fees, which will provide you with peace of mind and allow you to avoid potential payments. For instance, numerous starter cards do not feature annual fees, meaning you can use a card to pay a specific streaming platform and set an automated payment to handle it a day after. 

Your provider will consider that payment on time and regularly, and you can rest assured that you can use it for years afterward without a need to decline it. In the same way, late fees will not happen if you handle the balance on time, meaning you can rest assured and make payments you can handle a few days after. 

Avoid significant expenses for a first card; make small payments to boost your score. You can avoid foreign transaction fees by using another payment method outside Norway. At the same time, some issuers specifically function for foreign transactions, meaning you should consider these options. 

Balance transfer fees will happen only when you take a specific card that allows certain transfers, which is a common consideration among people who wish to consolidate debt. On the other hand, you should avoid withdrawing cash from a credit card because each time you do it, you must pay a fee and direct interest without a grace period. 

Also Read: How to Obtain a Credit Card Loan and Who Is Eligible?

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