BECU: Three Tips to Help Choose That First Credit Card
TUKWILA, Wash., August 27, 2024 (Newswire.com) - Credit cards can be tools for achieving financial goals by helping build credit and access a variety of benefits. But with so many options to choose from it can be tricky to know where to begin, particularly for first-time credit card users.
To help make an informed decision, here are three tips for first-time credit card users.
1. Understand Credit Scores
Before applying for a credit card, learn how building a credit score works. A strong credit history and high credit score can lead to numerous benefits, including premium cards that offer rewards and higher credit limits. A higher credit score could also help you get loans for lower interest rates. To help maintain a good credit score, pay off the credit card each month and use 30% or less of its balance.
2. Explore Credit Card Options
It can be challenging to get approved for a credit card with limited or no credit history. A secured credit card is an excellent option for first-time users looking to build credit from scratch. These cards require a security deposit and typically start with a lower credit limit. Secured credit cards can be particularly beneficial for users with limited or no credit history and for users recovering from a financial setback.
3. Learn Common Credit Card Concepts
Understanding key terms is helpful when opening that first credit card.
Credit card interest rate or APR (annual percentage rate): The annual cost of borrowing on the credit card that is applied to any balance not paid in full each month. This rate can be fixed or variable and is often compounded daily, which increases the amount owed over time.
Credit card fees: Often charged for late payments, cash advances, foreign transactions and annual fees. These vary between cards and impact overall credit card costs.
Credit card benefits: These might include cash back, discounts and travel benefits. Be careful with some loyalty programs, as a 2024 study found that when credit card rewards increase, so do fees.
Take The Next Step
Work with a financial institution or open a credit union account online to explore options and choose the credit card that’s best suited to financial goals. With these steps, users can start to effectively manage that first credit card and work toward ensuring a stable financial future.
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About BECU
BECU is federally insured by NCUA and an Equal Housing Opportunity Lender (Boeing Employees’ Credit Union NMLS ID 490518). With nearly 1.5 million members and $29.9 billion in assets, BECU is the largest not-for-profit credit union in Washington and one of the top four financial cooperatives in the country. As a member-owned credit union, BECU is focused on helping increase the financial well-being of its members and communities through great rates, few fees, community partnerships and financial education. The credit union currently operates more than 60 financial centers, including two in South Carolina.
Source: BECU
