IMPORTANT ANNOUNCEMENT: MyWalletHero is becoming The Motley Fool UK - click here to read more about our name change.

How to Get Your First Credit Card

How to Get Your First Credit Card
Image source: Getty Images

Like all great milestones, getting a credit card is a pretty big deal. After all it’s your 8x5cm plastic ticket to financial freedom and flexibility — used responsibly of course.

Let’s take a look at how credit cards work and how to get one.

How do credit cards work?

Credit cards are like short term loans – they let you buy shiny new things without you having the actual funds to do so.

When you get a credit card, the card company will set a limit on how much you can spend. At the end of each month, you’ll get a bill for everything you’ve bought and be given a date you have to pay it by.

Your bill will give you a choice: pay off a minimum amount or the full amount (the balance). You’re also welcome to pay some amount in between the two.

Coughing up in full by the deadline is almost always the best option. It means you won’t pay any more than you’ve spent. If, for example, you’ve bought £100 worth of stuff, you only pay for £100 worth of stuff, rather than £100 plus interest.

Indeed, if you only pay the minimum, you’ll face interest charges — remember, a credit card is a loan, it’s not free money.

If you continue to use the card and only ever cover the minimum, the balance will get bigger and you’re likely to pay interest on the interest. That’s known in the trade as ‘compound interest’. This can lead to a cycle of debt that can be hard to dig out of. So in almost all cases, the golden rule is: Always pay off what you owe in full.

How do I apply for my first credit card?

Applying for your first credit card is easy enough. These days you have a lot of options. You can:

  • Find and apply for a credit card online,
  • go to your bank or building society,
  • apply for one by post,
  • or apply over the phone.

You’ll be asked all sorts of questions and you’ll usually need to meet certain rules set out by the credit card company. In almost all cases, you must be at least 18 years old, live in the UK, and you might need to earn over a certain amount (or prove that you’ve got a steady job).

Based on the answers you give, the credit card company will accept or decline your application.

Obviously, if you’re accepted then it’s good news and you can merrily start flexing your new spending powers – but don’t get carried away. 

What happens if my application for a credit card is denied?

If the computer says ‘no’ and your application is denied, it could be for any number of reasons. If you’ve never borrowed money (for instance, a student loan), it could be because your credit score is low or non-existent. If you think this might be the case, you can find out how to check your credit score and confirm if that might be the issue.

Your score is essentially a summary of how well you manage your money and it’s used as a gauge by credit lenders. The better the score, the better ‘risk’ you are. In other words, you can be trusted to pay back what you owe and not run off into the sunset.

You can also ask the credit card company why they declined your application, but they don’t have to tell you.

How to get your first credit card with no credit history

Admittedly, being denied a credit card because you’ve never had credit before is a bit of a chicken and egg scenario, which can be frustrating.

If you’ve been denied, don’t keep applying. Those applications will show up on your credit history and make it look like you desperately need cash. That, in turn, sets off all sorts of alarm bells to lenders and will make it even more difficult to get approved.

Instead, you could consider one of the many credit builder cards, sometimes called ‘credit cards for bad credit’. Don’t be put off by the name, they aren’t just for people with a chequered credit history, they can also be a good place to start if you need to build up your credit score.

Choosing the right card

There are all sorts of credit cards out there so before you apply, have a think about why you want one. From helping lower interest cost on current debt or allowing you to make a necessary home repair, to just getting a bit more financial freedom, there will be a card that suits you. So, whether you’re a first-timer or experienced credit card hopper, take some time, do your homework and choose wisely.

If you need some guidance on where to start, check out our list of top-rated credit cards in the UK.

Pay 0% interest on new purchases and balance transfers for 22 months – and earn reward points every time you shop!

The M&S Shopping Plus Credit Card* offers shoppers a 22-month 0% interest period on both new purchases and balance transfers. Not only that but you can also earn retail reward points every time you spend – whether in store at M&S, or elsewhere.  21.9% representative APR (variable)

*Affiliate Partner.

Was this article helpful?

Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.