Illustration by Zara Picken
I remember the exact time and place where I got my first credit card. It was after university, when I got my first full-time job and as soon as I got my first pay-check I went to the bank branch to apply for a credit card. I always knew it was part of “adulting” and building a good credit score. If anything, I was probably a bit late. At the same time, having a credit card is a responsibility and I was really confused and concerned as to why I was given such a high credit limit. It was well above my monthly salary. That felt intimidating. In some ways, using a credit card well is an exercise in prudence, which is why using it well shows banks and lenders that you are trustworthy and low-risk to be given a loan. This will be very important when you try to take out your first loan, mortgage, car financing or a small business loan.
Getting started with credit is important, not only to build your credit score for when you want to take your first loan or mortgage, but also to teach you about being financially prudent and in-control of your finances.
If you’ve never had a credit card before and you just want to learn how it all works, it’s good to start with a 0% credit card, meaning you don’t pay interest on your balance for up to 20 months, depending on the card. These are also a good way to break down a big payment into monthly instalments without paying interest. Some good options are:
If you’re all about the points and rewards then you want to get an American Express card. They charge vendors slightly higher fees than other providers which is why they can give you the best rewards. In turn, some vendors don’t accept Amex because of this.
If you find yourself paying down a big credit card debt and your interest payments are big then you should get a balance transfer card. You’ll pay a percentage of the balance to move it over and then pay 0% interest for a number of months.
If you have bad credit and need to improve your score
If you’re comfortable with the idea of having more credit than you need and want to start using credit cards for most of your spending in order to maximize on points and rewards, then look at these options:
Having more than 1 credit card is not a problem as long as you stay on top of your payments. With Quirk you can connect your different credit accounts and make sure you never miss a payment.