Credit Card Andy

Teaching the Basics of Personal Finance

Credit Cards Part 4: Applying For Your First Credit Card

Here’s the funny thing. Credit card companies check your credit history to see if you should be approved for your first credit card.

But how in the world are you supposed to build up any credit history without a credit card!?

With the recent backlash against credit card companies from the government and general public, the days of easily accessible credit are gone. Companies hold credit card applicants to higher standards in deciding whether an application be approved or denied. This is a good thing for most consumers, but a slight annoyance for us informed users.

There are credit cards designated for college students. These cards are typically easier to obtain, but they start at a very low credit limit (they don’t let you spend a lot on it). You will probably want to focus your search efforts on these types of cards in starting out.

I did that. I looked at all the student credit cards, compared the rewards/benefits of each, and picked the right one for me. I put in my application and waited. After about a month of waiting, my credit card arrived in the mail.

It was pretty simple and I began my journey with my first credit card.

My Younger Brother

What took me by surprise was opening one for my younger brother (who is a college student).

I wanted him to start building his credit history, so I walked him through the same process I went through. To my surprise, his application was rejected!

I was shocked. It was for the same credit card, and he had pretty much the same credit history that I had (none).

What I learned from his failed application and my successful one was that you should at least have some sort of income. My younger brother recently quit his job, so he put down that he was not making any sort of wage. When I applied, I had a wage, so the credit card company saw my application favorably.

If you find a credit card you like, you’ll find that you have to fill out a basic online form. You will need your social security number, and at one point, it will ask you how much you money you make. In my brother’s case, he could have thought about how he made money from the job he had just quit and how our parents were willing to pay for most of his expenses while he is in school (lucky guy). Considering he knew he would be able to make all the credit card bill payments on time, I think he could have taken those into account and wrote down a slightly adjusted wage level. The credit card companies sort of take your word, especially for these types of student cards since they don’t have much history to look at.

I’m not saying you should flat-out lie on your credit card application. If someone is supporting you through school and this credit card is there to help you build a credit history along the way, then I think it’s okay to adjust the numbers to more a**ccurately reflect how you will be able to meet credit card payments**. Be aware, the credit card company did have my brother call them and verify some of the details in their review of the credit card application. I, on the other hand, did not have to do such a thing.


Regardless, don’t be afraid to apply for a credit card and be rejected. I am having my brother wait about 6 months before reapplying. One important note about this is that when you apply for a credit card, companies typically do a hard credit pull. This means they have requested an official report from one of the bureaus, and the credit bureau logs this pull in their report (so others looking at your report in the future can see how many hard pulls have been performed in recent history). These hard pulls negatively affect your score slightly. It would be unwise to apply for 10 credit cards right before you need an important loan from the bank or something. If you are just trying to get your first credit card, I can’t see how a few hard pulls on your credit would affect much since you don’t have much a credit history anyway. These hard pulls stand in contrast to soft credit pulls that provide something like glimpses into your credit history without having the credit bureaus log it. So it’s okay to have 100 soft pulls on your credit since no one will see how many times that has been done.

Other Ways of Obtaining a Card

The credit card I applied for highlights the fact that it requires no co-signer. If you don’t have a credit history, a credit card company may want you to find someone willing to share their creditworthiness. Basically, the credit card company will give you a credit card based on this person who is guaranteeing to jump in if things go wrong. Here’s a short little post explaining what some of the cons of co-signing are.

Don’t get duped into using a prepaid card. These are cards that you basically load up with cash, and then spend like a debit card. These do nothing for your credit history or score. There is no borrowing and paying back in this setup.

A secured credit card is a great option if you’re finding it difficult to get approved for any card for one reason or another. These typically have higher fees and require you to make a deposit before hand. Basically, these are credit cards where you front some money to guarantee you do not default on a credit card payment. These cards should definitely only be used as a stepping stone in either establishing or rebuilding your credit score.

Future Post

I’ll talk about how I ended up choosing the Citi Forward card and how I used as a tool in my credit card search in a later post.

Any questions or clarifications I can make?