Getting your first credit card is a big deal in your financial independence. Although credit cards are usually reasonably easy to obtain they have a reputation for getting people into trouble with money. As young applicants will be aware the best credit cards tend to only be available to consumers with a good credit rating. A credit rating is the culmination of details in a credit report which is made up of a consumers credit history or simply put the way in which debts have been treated in the past. Credit card companies, and other lenders, have found that past behaviour is a good indication of future behaviour.
Unfortunately for students and other first time credit card applicants instant approval credit cards may be out of the question as the programs designed to grant approval will lack the required amount of information and may need human approval.
Credit cards with the lowest interest rates and highest credit limits are out of reach to a young borrower who has not established much of a credit record. For this reason it is often a advisable for the first time credit card applicant to accept a less than ideal credit card with a high interest rate, make some small purchases and diligently repay the balance to establish a good credit history and then look to apply for a more competitive credit card with low interest rates.
Store cards are often a first credit card for many borrowers. This is because many credit card users do not start out looking for a credit card but are offered one at a store where they want to buy something. It will often be the case that they are already waiting in the queue to buy a good and they are offered the opportunity to buy the item with credit. As they are in the store they will also have fewer credit checks than they would have if they applied over the internet or by post. This convenience tends to mean that these cards have higher interest rates and worse conditions than many other credit cards.
Co-signatory cards are another option for young people that can be popular with parents and guardians as it introduces the young consumer to debt and responsibility without allowing it to get out of control. These credit cards have a co-signatory with a higher credit rating who will guarantee that any card balance will be repaid. The co-signatory will in most cases be the parents.
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