Once somebody turns 18, they are introduced to the world of “adulting”: signing their own paperwork, not needing parental permission, starting to accept financial and personal responsibility for themselves, and as a part of that, starting to build their credit.
When picking a first credit card, there are a couple of factors to consider.
First, it’s important to pick something that is easy to keep track of in terms of spending. If you are new to managing your own money, this is crucial. It can be done by deciding to have your first credit card be an in-store credit and rewards card. This way, it’s easier to keep track of your purchases and how much you need to pay back, since you probably have a decent idea of how much you spend per month at one specific location.
Stores like American Eagle Outfitters, Target, and Nordstrom all have an in-store credit card. The store itself is the only place that accepts its credit card, which means that you are sure to keep a limit on your spending.
Secondly, it’s an added bonus to find a credit card that helps you build up some other form of benefits or rewards. For example, cards from the locations above allow you to build up rewards points with their company, which can be used for discounts on purchases, gift cards, or even cash back.
Another popular form of rewards that can be found with credit cards is air miles. Alaska Airlines and other major airlines have credit cards that you can sign up for with them (oftentimes while you’re on your flight!) and most places accept the card. As you make purchases, you’re also building up miles to use towards flights with Alaska Airlines and its partners that accept the same points system, which include KLM and Carthay Pacific. You can also sign up for an account with a Star Alliance airline, like United or Air Canada, which also allows you to accumulate points with airlines like Air New Zealand, Lufthansa, Swiss Air, Turkish Airlines, and South African Airways.
There are some individuals who have learned how to use the points system on their credit cards so successfully that they rarely pay for flights anymore. There is one drawback of using an airline’s credit card as your first: it is more difficult to keep track of your purchases, as they aren’t limited to one specific location, which can lead to excessive spending.
One specific example of a great first credit card is the Victoria’s Secret Angel Card. This card can be used at Victoria’s Secret, PINK, and partner stores Bath & Body Works and Henri Bendel. You’re able to build points up to receive rewards cards for discounts in the mail every month, there are no annual fees for maintaining the card, and you also receive early access to all major sales. In addition, you receive a rewards card for your birthday month. It gives you the chance to limit your spending and receive rewards at the same time, which is an amazing way to start to build your credit and start to “adult”.