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As soon as you hit the age of 18 years old you are now considered an adult to apply for things such as a credit card. At this age, you are believed to be mature enough to handle things such as debt. But there are a few useful things that you can do before signing out your first credit card to ensure that you know how to responsibly handle it.
Have a trial run
Having a credit card is a financial commitment that you need to carefully consider. As much as you can opt out of having one whenever you would like to it will be beneficial to know the basics before you sign up for one. Having a trial run means that your parents can add you as a supplementary cardholder to their credit card if you haven’t hit the legal age of 18. This means that you will receive a credit card that is linked to their account which can make for a good training ground when it comes to having your own. Depending on your parents’ provider you can start as young as 14 or 15 years of age.
Get a prepaid credit card
If you are yet to be an owner of a credit card, having a prepaid credit card can also be a good trial run. A prepaid credit card allows you to load money into the card that can then be used to save. It can help you understand the basic of spending within your limits and not being tempted to spend what is beyond your financial reach. A prepaid credit card comes with convenience and flexibility, but It can also be a useful tool when it comes to learning how to budget with your card in mind. By the time you have your credit card, it will come naturally to budget.
Know the requirements
Credit card requirements differ from lender to lender, but it is a good way to see if you are ready to be a responsible owner of a credit card. Things that are most likely to pop up in terms of requirements will be:
Credit history:
Your lender will view your credit history to see if you are a responsible borrower. This means that you need to check your credit report and credit score to see if it is in a good condition, which in turn will make the application process smoother.
Minimum income:
In order to help you not take on a card that could push you into debt or make it a struggle for you to meet monthly repayments, lenders require that you have a minimum income to access particular cards. The most basic cards require that your income exceed $15,000 p.a.
Employment status:
Taking out a card while you are unemployed or financially unstable is a risk to you and your lender. Therefore, it is a requirement that you show that you are either working full-time or part-time. Identification: You will be required to provide your personal information and identification, along with your proof of income.
Above all, it is vital that you check that the credit card you wish to apply for is suitable for the type of spender that you are. Checking the features will help you see if you are getting your money’s worth and whether it will complement or compromise your financial health in the long run.
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