Credit cards are useful financial tools—helping you build credit, acting as a backup form of payment and, sometimes, enabling you to earn rewards. But obtaining one for the first time may come with obstacles. The guide below offers tips for navigating them.

How to Acquire a Credit Card

1. Know Your Credit Score & History

The higher your credit score on a scale from 350 to 850, the more likely you are to be approved for loans and the better interest rates you’ll receive. This value is typically determined based on five categories: your payment history, amount of credit utilized, the length of your credit history, your total number of accounts, and your number of credit inquiries. 

While some of these factors are hard to influence—for example, you can’t make yourself have a longer credit history—you can improve your ranking by paying your bills on time. Most people with no credit history will start off with a middling score.

2. Limit Credit Card Applications

When you apply for credit, it’s shown as a “hard” inquiry on your credit report. Because of this, applying for too many cards at once can negatively affect your score. Therefore, limit the number of places you appeal to.

If you’re a member of a credit union, start your application process there. Since these financial institutions are owned by the members and are nonprofit, they often have better interest rates and terms.

3. Consider a Secured Card

If you aren’t approved for a standard credit card, look into a secured one. These cards require an initial deposit that usually ranges from $200-$500 and also serves as your credit limit. 

While this sounds like it’s the same as a debit card, it’s not. The payments you make will be reported to credit bureaus and impact your credit score.

Stop by Spirit of America Federal Credit Union in Lincoln, NE, to apply for a credit card. This member-owned credit union has been serving the area since 1932, offering convenient online banking and secure checking and savings accounts. Visit their website to learn more about this NCUA-insured institution or contact them at (402) 467-1102 with any questions.