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Getting a credit card for the first time can feel like a big step forward for personal finances and potentially provide you with more financial freedom or hardships than ever before.

But the criteria for credit cards and how they are used can also have a lasting affect on your credit rating and potential investments down the track, so if you are thinking about getting your first credit card, there are a few things you should know before sending off any applications.

Credit Ratings

Credit ratings created by lenders based on your credit report. Your credit report is made up of information on past debts and payments, with a particular focus on loans and other financial services.

Without a credit card history, your credit report may be quite bare, but it is a good idea to get a free copy and make sure that there are not any overdue payments for things like phone bills that could bring your credit rating down.

Both MyCreditFile.com.au and Dun & Bradstreet offer free and paid personal credit reports that may help you know what kind of credit card you are qualified for.

Credit Card Providers

When applying for your first credit card, the provider can be a significant factor for future loans and financial services.

Someone who has always banked with the Commonwealth Bank or St George, for example, will have a history with that bank that could be an advantage. In fact, if you have a poor credit history, your bank may be willing to discuss alternatives like a secured credit card or co-signed card.

Credit Card Use

Once you have a credit card, your rating will change according to how well you use the card. Many first time cardholders will be limited to basic, student or first-time credit card offers like the ANZ First. Usually these cards will not offer the lowest interest rate, but are the foundations for better credit card offers later on.

Getting into the habit of paying off the card every month is a good way to increase your credit rating so that you can work towards getting a credit card with more features, like low interest or rewards.

Credit ratings will also affect your chances for other loans, like mortgages, so planning ahead and using your card accordingly can be a big help in other areas of your life.

If you are thinking about other kinds of loans in the future, it is also good to consider your personal banking history.

While your credit rating will have an impact, banks also have access to more information and can see how well, or badly, a credit card provided by them has been used in the past.

Your first credit card sets the tone for a number of different financial opportunities later on and balancing credit card convenience with a bit of consideration will help you work towards even more benefits from credit cards and other services.

As the internet becomes more and more a part of everyday life, it is now easier than ever to apply for a new credit card.

But before jumping onto an application page it is a good idea to look at both positives and negatives for the process so that you can decide when you want to make use of an application online and when it may be better to find an alternative.

Online Credit Card Application Benefits

In the past people had to wait days or weeks to find out if an application had been approved, but now most credit card providers will inform you within a few minutes of completing the online process whether or not it is successful.

The information that you need to fill in an online application is relatively straightforward and should also make the process easier. Things to keep nearby include:

• Your driver’s license number
• Employment details
• Income details
• Any other assets or liabilities; and
• Details for any current credit card balances that you would like to transfer onto the new card

Different credit providers also have varying ways of deciding on your credit rating based on credit history. If one provider knocks you back, another may still accept your application, so being able to access application results quickly can also help you find the right option if bad credit is an issue.

Online applications not only make it easier to apply and be approved for a card that you want but also, with other websites only a click away, there is more opportunity to compare different credit card offers and features so that you can be sure you are making the right choice before you apply.

Disadvantages To Online Applications

When something is easy, it is often done without considering what kind of implications there may be later on. Applying for a credit card can end up listed on your credit report, regardless of whether the application was successful or not.

Unfortunately an unsuccessful application could bring down your credit rating for some providers. Someone who may not have a strong enough credit history to apply for an American Express card, for example, may then find other credit applications denied as a result.

So if applying more online than you would on paper leads to even more unsuccessful requests, it can affect your chances of being approved for other options.

If credit card approval is a concern, however, it may be a good idea to consider a low interest card and suggest a lower credit limit to start off with. Calling a credit provider before applying could also help you to understand what they are looking for and fill out the online application process more efficiently.

While applying online is definitely faster than traditional paper applications, it is a good idea to keep these things in mind at all times. That way you have more chance of being approved every time.

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