Excited for Your First Credit Card? Get it the Right Way!
Being an adult is liberating, isn’t it?
You can vote, you must be joining college soon if you are not there already.
You can obtain a credit card.
As excited as you might be for obtaining your very first credit card, we hate to burst your bubble, but the card providers may not be very eager on giving you one. Instead of putting in multiple credit card application for checking who would give you approval, you can limit yourself to companies, which specifically provide credit cards to first-timers.
Here are a few things you need to keep in mind if you are applying for a credit card for the first time.
Ensure that you are Ready for Your First Card
Being of the age that makes you eligible for a credit card doesn’t necessarily make you ready for one. You must be responsible enough for charging only that you are capable of affording. You should be able to pay your monthly bills without any reminders.
Obtaining your first card without being entirely prepared may turn disastrous for your credit. When your credit gets damaged, getting it back on track can be difficult.
Do not set up yourself for failure. Learn about credit cards as much as you can before you get one. Do not apply if you are not prepared.
Understand the Landscape of Credit Card for the Young Adults
Getting your first approval for a credit card can turn out to be difficult, especially when you are around 21 years old, moreover, without a job.
First of all, the laws in the UAE state that the young adults under a certain age as determined by the law have a verifiable income before getting approval for a credit card, without having a cosigner.
Nothing except an income from a job would work. However, some government benefits or child support might get you approved.
If you do not earn an income, then you will have to look for someone who is ready for opting for a joint credit card with you. Another option is making you a legitimate user on any one of their credit cards.
Another thing that might cause hindrance in getting your first card is inadequate credit history. And, you must know that credit history is amongst the primary factors for credit card providers to consider while giving approval to the applicant.
Getting a Job in UAE
Having a stable income, ideally, through a full-time or part-time job, may put you in an ideal position for getting the first credit card that you have been excited about.
Credit card providers need to make sure that you are capable of affording the repayment of the balance on the credit card before approving you.
If you do not have a job or do not earn an income, you will have to be a joint applicant (with someone who has an income) for credit card eligibility UAE.
Where to Obtain the First Credit Card from?
There are some providers who offer student credit cards. Hence, if you are still in college, you have high chances of gaining approval for a student credit card from such a provider. However, you should not consider every card with ‘student’ as the title to be a good deal.
Some of these credit cards come with high rates of interest as well as annual fees. The cards having both of these things are not really an ideal option for your first credit card.
Then, where should you get your first card from?
In case, you have a savings or checking account, you can try to apply for the first credit card of your life at your bank. The chances of your application getting approved are high with an existing banking relationship, especially if you have been using your account responsibly. For example, you have not made any overdrafts.
You can submit your application online. However, going to the branch of the bank would make you meet the representative who might possess more authority for getting approval for your application.
Secured Credit Card
When you do not have a credit history, and it causes hindrance for you in obtaining a standard credit card, you can go for a secured one. Using a secured credit card, you can make a deposit against the account credit limit.
The bank holds your deposit, just in case you fail to make the payments as it was agreed. You might get a chance of converting it into an unsecured credit card in the future. Don’t worry! The secured card won’t hurt your probability of obtaining other cards. Your credit report contains nothing that would indicate the presence of your secured card.
Departmental or Retail Store
Departmental or retail stores usually have more favorable odds for approval. However, on the downside, these cards come with high rates of interest, which makes carrying a balance expensive.
Another disadvantage of these cards is that they are not versatile. They can be used only in that particular store they are issued from. This can limit your purchases. However, retailers generally encourage spending through this card by providing various discounts.
If your first credit card is a retail store credit card, it can help you in building up a decent credit history for applying for a standard credit card in a matter of a few months.
Going for Cards That Include Limited or Moderate Credit
There are some websites for credit cards that list the kind of credit history required for getting approval. In the case of first credit card, you must go for the ones, which accept the applicants having low or no credit.
Submitting a credit card application that is geared specifically to your credit history improves your probability of getting an approval. It is recommended that you avoid the applications for the credit cards that need excellent credit as there are high chances of your application getting rejected.
Look for Help from Someone
You might have some relative, for example, any one of your parents, who would be willing to help you in getting your first-ever credit card through the option of cosigning it with you.
However, cosigning can be risky. If you make any mistakes, it will impact both, you and the cosigner. But, it can also prove to be a jumpstart for your credit. Be upfront in agreeing that you will be responsible for making timely payments every month and that you will follow all the terms on your credit card. You can then consider closing the joint account after you qualify for a card on your own.
Don’t Let Rejection Discourage You
Don’t get shocked if your first application for a credit card gets rejected. In fact, the first few applications for that matter. Even applicants with an established credit history get rejected sometimes.
Just look for the reason why your application got rejected. This information will prove to be useful for you to plan the next step. You can probably apply for a different kind of credit card or jumpstart the credit through a secured credit card.
Suffice to Say!
The time has long gone when a credit card was a luxury. These days, it has become a must-have accessory that you carry in your wallets.
While submitting your first credit card application, there is a lot of excitement and enthusiasm. However, make sure that you apply for the credit card properly. Read the tips mentioned above to know how to obtain your first credit card in the UAE.