In the US, you magically become an adult as soon as you turn 18. Feel anyway, when your 18th birthday comes around, you’ve now earned a lot of new rights and privileges – without parental consent.
One such privilege is getting your first credit card.
It may seem overly ambitious, but applying for my first credit card when I turned 18 was one of the best financial decisions I made for my future. After all, learning how to manage a credit card is an important step in managing your own finances, so why not start as soon as possible?
While important life events like signing an apartment lease or applying for a car or mortgage may seem far away, the truth is that the best time to start preparing was yesterday, which means the second best time is – today.
I will tell you how I got my first credit card at the ripe old age of 18 and how I was able to use it to set myself up for financial success.
How credit cards work and why you want to apply for one at 18
At 18, you can legally apply for a credit card on your own. Credit cards are different from debit cards in that you borrow money and spend money at the bank (rather than using money from your own bank account).
Your first credit card will have a low credit limit, probably less than $1,000 to start with. If you pay off all of your statement credit (or whatever you charged your card in a given month) by the end of your monthly billing cycle, you will not incur interest or late fees. It’s also how you improve your credit score over time.
Read more: How to use a credit card responsibly
On the other hand, if you fall into the trap of paying only the minimum amount for a billing period, which is typically between $25 and $35, the remaining debt will accumulate interest and negatively affect your credit score. Therefore, it is very important that you treat your credit card like a debit card and remember to charge only the amount you can afford to repay.
All this may sound intimidating, but if you start at 18, by the time you are a working adult, you will have a long history of credit. I can’t tell you how many of my friends only used a debit card (or cash) in college and by the time they graduated they had no credit history to report. It then became very difficult for them to apply for a credit card later, or worse, show credit to the landlord who asked for it in order to qualify for the apartment.
Trust us to get started right away, even if you’re only charging your credit card for utility bills and basic bills. You will thank us later when you have an excellent credit score to show off.
Read more: How Credit Works: Understanding the Credit Reporting System
How to get a credit card at 18
No matter how old you are, applying for your first credit card can be confusing. It’s hard to know which credit cards you’re eligible for if you have little to no previous credit history.
But if you’re over 18, you have three options for getting your first credit card.
1. Apply for a student credit card
If you’re currently in a 2- or 4-year college, you’re in luck: you can qualify for a student credit card despite having no credit history and limited income. Student credit cards work just like any other “regular” credit cards, except they are for complete credit freshmen who are in school.
This is the easiest way to get your first credit card and I definitely recommend it to all college students.
You can check out our list of the best student credit cards to find the right card for you.