Credit cards are a convenient way to make purchases and pay back debt. They’re also a valuable tool in boosting your credit score and making it easier to get approved for loans. But if you have no credit or a poor credit history, getting a card can seem like a daunting task.
How do I start building credit?
Thankfully, there are several ways you can build your credit, regardless of your financial situation. The best way to start is by establishing good spending and payment habits.
If you’re a first-time credit building credit card user, it might be best, to begin with a secured credit card. These cards are designed for people with a bad or limited credit history and require you to put down a deposit.
Secured cards help you build your credit by allowing you to spend just like with a regular credit card, but you’ll need to pay off your balance in full every month. If you manage the account responsibly, your credit score will improve over time and you’ll be able to graduate to an unsecured card later on.
Another option is to add yourself as an authorized user on someone else’s credit card. This works well if you have a partner or parent that doesn’t mind giving you access to their account and if you have good payment habits and a low credit balance.
However, it’s important to note that if you don’t use the card responsibly and make late payments, this will hurt your credit report and could negatively affect your score. As a result, it’s best to wait until you have a better understanding of your spending habits and payment habits before applying for any premium rewards credit cards.