18 and ready for first card: Begin here


Opening Credits
Columnist Erica Sandberg
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for

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Dear Opening Credits,
I'm 18 years old and looking to get my first credit card. I had a $1,000 loan for my car that was paid off within a year and had no late payments. I have an annual income of between $5,000-$7,000 from a job I've had for about three years. I was wondering what card would be right for me? Should I start with a student card or go right to a regular card?  -- Alyssa


Dear Alyssa,
There isn't a tremendous difference between credit cards for people in college and cards for the general population. In fact, student accounts are pretty much the same as other "starter" cards. The issuer assumes that you're young and haven't yet had the opportunity to establish a long and positive credit history. Therefore, lending to this population is considered risky, so the cards tend to come with higher-than-average interest rates and with less-than-awesome rewards programs.

Now, a lot of people think that student cards are guaranteed -- because you're in school, you automatically qualify. Not so. Way back in 2009, the Credit CARD Act changed to make it more difficult for anyone under the age of 21 to obtain a credit card in their name only. Today, younger applicants need to possess an income capable of supporting a credit line. Without it, a person who is both of age and creditworthy would need a co-signer. The co-signer could be legally responsible for any delinquent debt, no matter who spent the money, if the primary account holder defaults. Back-to-school guide 2016

Back-to-School Guide 2016

Still, based on what you've written, I have a feeling that you can get your own account and it needn't be one that's marketed to the college set. Not that student cards are bad -- they can be great -- just that the broader world of credit may also be open to you.

The amount of money you're currently earning should make you eligible for a personal credit card with at least a low charging limit of a few hundred dollars. Additionally, you probably have a decent credit score and that, too, will help push you into the more desirable customer profile. Assuming your name was attached to the vehicle loan, a complete record of your payment history is appearing on your credit reports and is being calculated into your credit scores. Evidence that you made all payments on time and that the debt is now fully satisfied surely has pushed your scores up.

In short, all issuers really want to know is that you've demonstrated financial responsibility in the past, and that you're making enough to support the possible debt on a particular product.

To know which cards are available to you, pull your credit reports from to make sure no errors are holding you back from qualifying. Then get your score from Scores are available from each of the big three credit reporting agencies (TransUnion, Equifax and Experian) for about $20 apiece, but you need only to purchase one to get a good idea of where you stand. FICO scores range from 300 to 850, and if yours are at 650 and above, you're at least in the good category. Below that number and your scores are fair.

Check out what's currently being offered for students as well as people in your scoring range. When you find the account that appeals to you most, go for it.

If you're denied, you'll get a letter explaining why. Either your income or credit scores are too low. At that point you can try to find a co-signer to help you over the hump. Whichever way you get the card, use it to your advantage from the start. How? Just charge and pay in full by the due date -- over and over again.

See related: Tips for getting that first credit card

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Published: February 11, 2015

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Updated: 10-27-2016

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