You may have been wondering what’s the Best Time for Young People to get a credit card. I will shed more light on that here.
Having that three-digit number which is your credit score can have a big impact on your financial life. The better your score, the easier it will be to lease your first apartment, purchase a car or embark on a new career. This is because employers will frequently check your score before hiring you.
Even though understanding the basics of personal finance might seem a little overwhelming for a newbie, the basics are quite straightforward. You can start by opening a credit card at the early age of 18. This will enable you to start building credit at an early age and also in developing good habits.
Why Establish Credit Early?
Your length of credit history is the third most important factor in achieving a good credit score. This comes after making on-time payments and keeping your total low. Lenders love to see that you have been able to keep your account in good standing over the years. Thus, consumers with long credit histories, have a major advantage.
How Does Building a Good Credit Help You Later?
With a good credit score comes so many advantages. Notable amongst them is that you get qualified for the best rates on loans and credit cards. A good credit score also Impacts your auto and home insurance rates. With an excellent credit score, you may qualify for the best rewards credit cards. A good credit score can also help your chances of getting a job or promotion if your employer requests a review of your credit report.
Without a credit score, you will be“credit invisible”. This means that you have no record of proving your ability to borrow money. With this, applying for a loan will be more difficult which can make life more challenging.
How Old do You Have to Be to Get a Credit Card?
The Best Time for Young People To get a credit card is to be at least 18 years of age. but you can be an authorized user at the age of 13.
Once you are ready to sign up for a credit card, you must be prepared to show some documentation. According to the CARD Act of 2009, applicants between the ages of 18 and 21 are to show proof of verifiable income. Like a pay stub, tax returns, commission checks, or investment statements. This is a measure put in place to discourage lenders from approving young applicants for high-limit credit cards. So they will be well equipped to pay back.
The Best Time for Young People To get a credit card is as soon as you know you can afford any changes you make. And also being responsible for handling credit. This means not charging more than you can pay and being prompt with your bill payment each month.
If you are a student, you can try your hands at getting a student credit card. You are not a student and do not have any credit history yet, you can start by applying for a secured credit card. If you already have a credit history, but not a good one, you can go for cards, that can help you build your credit history.