Ten Tips: How to Get Your First Credit Card St.Petersburg Times September 2, 2001 Why is it that young, unemployed college students rarely have difficulty qualifying for multiple credit cards? Because the major credit card issuers figure parents will come to the rescue if their kids have a hard time paying their bills. But once students graduate, they suddenly may find themselves categorized as unsafe credit risks. If you've recently been turned down for a credit card, consider these tips: 1. Understand the system. To establish a credit history, you must show how dependable you are about repaying debt. Credit card and mortgage payments are reported to the major credit bureaus, but consumer payments, such as rent, insurance and utilities, are not. 2. Examine your credit report. To get copies, contact the three major national credit bureaus: Equifax, P.O. Box 740241, Atlanta, GA 30374, (800) 685-1111; Experian (formerly TRW), P.O. Box 2002, Allen, TX 75013, (888) 397-3742; and Trans Union, P.O. Box 2000, Chester, PA 19022, (800) 888-4213. If you spot any errors, clear them up right away. 3. Stay close to home. Try applying for a credit card at the bank where you have a checking or savings account. If you have a job and you haven't bounced any checks, you'll likely qualify for a card with a low credit limit. 4. Try gas or department store cards. If your bank doesn't come through for you, gasoline and department store cards are easier to obtain. Pay them off in full each month to show the credit bureaus how reliable you are. 5. Don't shop around. Avoid the mistake of applying for several credit cards at the same time. Card issuers will see the other applications and presume you're on the verge of racking up a mountain of debt. 6. Repay a loan in advance. Another way to build your credit history is to take out a small bank loan. Some banks will help you establish a good payment record by making loans that you pay off before you get the money. 7. Brace yourself for high interest rates. You're not likely to qualify for a low annual percentage rate, or APR, right away. Beat the system by paying your credit card bill in full each month and renegotiating the APR after six months or so. 8. Opt for a secured card. An almost sure-fire way to obtain credit is one that is risk free for card issuers: Request a secured credit card, which requires you to deposit money into a savings account upfront. 9. Get the card upgraded. Be certain that you'll be able to have the card's status changed to unsecured after about six months. It won't look good on your credit report if you rely on secured credit for too long. 10. Beware of vultures. Don't be duped by Internet promotions that promise to give you credit cards regardless of your credit history. Such deals typically involve excessive application fees, processing fees, annual fees and penalties. -- Compiled by Laura T. Coffey. Sources: Kiplinger's Personal Finance magazine ( http://www.kiplinger.com ); CardWeb.com ( http://www.cardweb.com ); and Credit.com ( http://www.credit.com ) To see more of The St. Petersburg Times, go to http://www.sptimes.com . © St. Petersburg Times. All rights reserved.
Very helpful advice. The first and second cards are always the hardest. I'm amazed that I ever got Citibank MC as my first card. And then it took me 6 years before Cap One offered me my second card. Now, 2 years after that, I have 18 cards.
Nice article! However, they should have included a warning about this particular tactic - if you have a credit card where you bank, read the fine print very carefully. Most include a clause that allows the bank to take your deposit funds in the event you default on the card agreement. And many card agreements define "default" rather broadly, including getting into trouble with any of your other debts. Even if you are in a dispute with someone, and there is a lawsuit, and it makes it's way onto your credit report, you could be considered "in default" even though you have paid on time for years, and even though the dispute may have nothing to do with bill-paying.
