Even more so than getting your diploma, the day you get your first credit card is seen as the time you pass into adulthood. That card from your parents? That doesn't count towards your credit history it's tied to your parent's line of credit.
Making your payments on time on your parent's card helps out their credit rating, not your own. In the world of financial dealings, you only become an adult when you get and start paying for your own card.
Whether you're still a student or have graduated already, your attempts to do adult things such as rent an apartment or purchase a car depend a lot on your credit history. If you went straight from your parent's house to the dorms, you might not have had much of a chance to establish a credit history.
In the world of credit history, no credit history is almost as hard to work with as bad credit. To the world of finance, you're an unknown quantity with at least a 50% chance you'll do poorly with a credit card.
It hardly seems like a good bet to lenders to extend you credit. Banks want everything to go their way, after all. So how do you deal with not being able to get credit because you have to prove that you don't at all need it?
It sounds crazy, but that's how the world of credit works. The quickest way to build credit is with a credit card. You shouldn't however, jump on board the very first offer of credit which you receive.
Go online and assess the terms and conditions offered from several different credit card companies. Look very carefully at the fine print. Some sites have made comparison charts related to these terms, which is certainly convenient when you're trying to make a comparison.
Look very carefully over the credit card offers you receive, you might be able to find one without an annual fee which also has a low APR (annual percentage rate). You may even be able to get one that starts you off with a low credit limit.
If you aren't planning to make any big purchases and just want to establish credit, this will work well for you. If you apply online, you can even get instantly approved.
Before long, your credit card will come in the mail. Then, all you have to do is shop, then pay off your card on time. You need to pay off your balance at the end of each month if you want to establish a good credit history. Charge only what you know you can afford when the bill shows up.
In just a few months of paying of your balance each month (or at the very least, making the minimum monthly payments), you'll have begun to build a good credit history. A good credit rating is important for far more than purchases.
A lot of employers nowadays now check your credit rating as a factor in determining whether to hire you or not. Research has shown that people with good credit tend to be dependable employees. Having a credit card by itself may not be enough to land that job, but it will get you a suit and a plane ticket to make it to the interview!
