A credit card can be a useful tool or a dangerous thing. It all depends on how you use it. It can make tracking expenses and monthly cash flow management easy.
If you use the grace period well and pay back all charges, it can be free to use too and earn you cashback or rewards. But, if used irresponsibly, it can plunge you into debt.
Let’s take a look at the basic requirements needed to get a credit card.
Age
You need to be at least 21 years old (or 18 provided you have your parent’s permission or a verifiable source of income) to get a credit card. This rule exists due to the CARC Act of 2009 that prevents banks from certain dangerous practices like marketing credit products to young adults without an income.
Social Security number
You need a Social Security number to build your credit history. Non-citizens without a Social Security number will find it rather difficult to get a credit card.
Income
Credit card applications always ask for an estimated monthly income because they aren’t going to extend credit unless they know you have a way to repay the debt. Total income is not required, but you will have to mention the amount of ‘available’ income that will be used to repay your credit card. It’s important because this is one of the factors the bank uses to decide whether they will approve your application.
Positive credit history
Unsecured credit cards need applicants to have solid credit histories. Credit card companies also require that applicants have good credit scores of 700 or more. There are some cards designed for people with fair credit and accept applicants with lower scores. The best ones may need applicants with a minimum of seven years of good credit history. The credit cards that have lenient application requirements generally have higher fees and interest rates. If you don’t have a credit history, there is an option: you can get a secured credit card that requires applicants to make a deposit between $200 and $1,000 into a bank account.
Remember to look for a credit card that suits your needs, offers rewards, low APRs, and matches your credit history.
