First credit card: a simple guide
Without a credit history, it can seem a challenge to get your first credit card. But everyone has to start somewhere, so here’s a step-by-step guide to how you could boost your chances of being accepted first time round. Plus learn how to use a card effectively to get its maximum benefit and avoid ending up in debt nightmare.
Without a credit history, it can seem a challenge to get your first credit card. But everyone has to start somewhere, so here’s a step-by-step guide to how you could boost your chances of being accepted first time round. Plus learn how to use a card effectively to get its maximum benefit and avoid ending up in debt nightmare.
60-second summary
If this is enough info for now and you would like to see which cards you’re eligible for, use our eligibility checker. |
Step 1: What to do before you apply for your first credit card
While you may not have much of a credit history at this point, there are steps you can take to boost your credit score. So before applying, do a little groundwork to improve your chances of success as you’ll have to pass a credit check to get accepted.
- Register to vote – being on the electoral roll gives proof of your address which could boost your credit score.
- Get your name on bills – make sure your name is on the bills at the address you're living at. This should also be the same address you use to apply for the credit card. Energy bills and mobile phone bills can all be used. This is useful for ID checks, and if you pay bills on time (see below) it should help boost your chances.
- If you don't have a job, try to get one – even a part-time job can show you have an income and are able to make repayments. You might struggle to get a credit card if you have no income at all.
- Open a bank account – managing a current account well can help to show you’re financially responsible and could improve your chances of being accepted.
- Pay your bills on time – if you can show you’ve been paying bills on time for the past few months, lenders have evidence that you could be trusted to pay back credit. But be aware that missed or late payments would go against you.
- Check your credit report for free – it’s worth seeing your credit history to get an idea of where you are on that journey. It’s then important to try and correct any errors on your credit file.
Lots more help is available via our guide on boosting your credit score.
What our expert says...
“Credit cards can be very useful if used well, as a tool to boost your credit score, cut the cost of debt from other cards, make borrowing cheaper, or get paid to spend. To get the best out of them you need to keep up with payments, never breach your limit, and don’t see them as easy money, sticking to spending only what you can afford.
But they’re also dangerous if you’re not disciplined as many people fall into a debt spiral by overspending or missing payments.
I like the analogy of fire, as credit cards are like fire. Used well, they’re a great tool, but used badly, and you can get burnt.”
- Guy Anker, Personal finance and insurance expert
No credit history? You can still apply for your first credit card
Getting your first credit card can feel difficult if you don’t have a credit history. Without a decent one, lenders may see you as a higher risk. A good credit history shows you can be responsible with money and manage your finances.
It’s far from impossible to get a credit card as a new borrower. But the number of credit cards you could be eligible for, and the credit limit you’d be given, might be limited.
There are things you could do to help boost your chances of getting your credit card application approved first time round, as explained above.
Step 2. How to choose a first credit card
When it comes to choosing your first credit card, you need to think about which type of card suits your circumstances.
This might feel bamboozling given the many different types of credit card available. To make things easier, we've matched up each card below to the type of people they're most useful for.
Need to build (or improve) your credit rating? A credit builder credit card can help
Credit building credit cards are specifically designed for people with a poor or low credit rating. Credit builder cards:
- Can boost your credit score – which is the big benefit – if you use one for everyday spending and pay it back in full each month.
- Typically start with a relatively low credit limit, but this can go up once you start proving your ability to manage credit.
- Tend to have a higher annual percentage rate (APR) than standard credit cards. But if you make your repayments in full each month there’s normally no interest to pay.
Are you a student? Think about a student credit card
If you’re a student registered on a course for a minimum of two years, think about a student credit card. In reality, they’re often similar to credit builder cards and don’t tend to have the same minimum income criteria as a standard card. Student credit cards:
- Typically have a low credit limit to help you avoid building up a lot of debt.
- Usually don’t have any annual fee.
- Can come with 0% interest for a certain period – but always make sure you clear the debt before the 0% ends.
- Can help to build your credit rating if you use them for normal spending and pay them off in full each month.
What other sorts of cards are there?
We’ve focused on cards above that help to develop or boost your credit score. But if you've already managed to build up a decent credit score, here are some standard cards that may meet your needs:
- Rewards or cashback cards – get rewarded with cash, points or vouchers if you can pay your bill in full each month.
- 0% purchase cards – you could borrow for a larger purchase with no interest for an introductory period.
- 0% money transfer cards – get money paid into your bank account (for a fee) that you can use to buy something essential, with no interest for a promotional period.
What credit limit will I get?
A credit limit is the maximum amount you’ll be able to spend on your credit card. As a new, first-time customer, it might not be very high. But you might be able to increase your limit over time by:
- Paying off your balance on time each month
- Using the card responsibly on a regular basis
- Keeping your credit utilisation low.
Some providers on our panel may tell you your potential limit before you apply if you use our eligibility checker.
What extra fees do these cards charge?
You should double check any fees and credit card charges you might need to pay. For example:
- Late payment fees
- Fees for using your card abroad
- Cash withdrawal fees
- Charges for going over your credit limit.
Step 3: How to understand your chance of being accepted
First thing’s first, you’ll go through a credit check when you apply, and you’ll need to meet other basic criteria.
Credit card eligibility criteria: will I be accepted?
Lenders tend to set their own criteria, so eligibility can depend on the credit card you’re applying for. To help with the complexity and uncertainty, we have a credit card eligibility checker that carries out a soft search on your credit file.
Other lenders cannot see a soft credit search and it has no impact on your credit worthiness. From this search, you can find out your chances of being accepted for different cards.
Basic criteria to be accepted
In the UK, typically you must be:
- Over 18 years old (though some firms only accept those aged 21+)
- A UK resident
- Employed
- Earning a certain amount, depending on the credit card lender
- A UK bank account holder.
Some student credit cards allow you to pay your balance with your student loan. But you’ll usually need to have a form of income to be eligible for these cards. This income could be a part time job or a personal allowance from a family member.
Compare the Market Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility.
Step 4: How to apply for your first credit card
Know what you need and ready to go for it? Applying for a credit card is pretty straightforward. You can apply in person, by phone, or online. You can use our eligibility checker to find a suitable card and then click through to the lender to apply.
You’ll need to give your:
- Name and address
- Date of birth
- Employment status
- Income
- Nationality.
When you apply for a credit card, the lender will do a hard search of your credit history. This is marked on your credit file for up to two years. Several applications in a short period of time can damage your credit rating.
Never just randomly apply for a credit card. Instead:
- Do your homework
- Read all the information carefully
- Compare cards to find the deal that’s right for you.
Step 5: You’ve been accepted – here are some tips on how to use your first credit card
Using your first credit card responsibly is crucial to building a solid credit history. Here are some tips on how to do so:
- Spend responsibly, as a credit card is NOT free money.
- Stick with small, manageable purchases – things that you can easily pay off each month. This could include everyday expenses like groceries or fuel.
- If you’re using a card to borrow money for a bigger purchase, stay disciplined – only use it for something essential and don’t spend erratically.
- Keep track of your spending – regularly check your spending via your app or statements and make sure you’re not going over your credit limit. Setting up alerts can help you stay on top of your spending and payment due dates.
- Aim to pay off your balance in full each month – this will mean you avoid interest charges and show lenders that you can manage credit effectively. Doing this is likely to boost your credit score.
- If on a 0% introductory deal, always make at least the minimum monthly payments – otherwise you could lose the 0% and be hit with penalties. Diarise to clear the debt before the 0% period ends to avoid paying high rates of interest afterwards.
- If you do carry a balance, try to pay more than the minimum payment each month – this will help reduce your debt faster and lower the amount of interest you’ll pay over time.
- Avoid using your credit card for cash withdrawals – these are often charged high fees and interest rates.
- Never miss a minimum monthly payment or breach your limit – this can lead to penalties, a hit on your credit score, and can mean you lose any perks such as a 0% deal.
- Set up a direct debit to make your payments – this way you won’t forget them. You can choose to pay the full amount, the minimum amount or a set amount of your choice. If it’s the latter, make sure it’s more than the minimum.
Building your credit score takes time, but using your credit card responsibly can help. You may become eligible for credit cards with better terms as you build a positive credit history over time. For example, cards with lower interest rates or more rewarding benefits.
Top tipSet up direct debits for regular bill payments such as your mobile phone contract. Direct debits:
Just make sure you’ve always got enough money in your bank account each month to cover the direct debit payments. |
Alternative Step 5: What to do if your credit card application is rejected
If your credit card application is rejected, it can be disheartening. But it’s important to understand why it happened and what steps you can take next.
Here are some common reasons people are refused credit cards:
- Limited or no credit history – lenders may be hesitant to approve your application if you have little or no credit history. This is because there’s no evidence to prove you’re likely to make your repayments.
- Low income – if your income doesn’t meet the lender’s minimum amount, you may be unable to keep up with your payments.
- High debt-to-income ratio – if you have a lot of existing debt compared to your income, lenders may see you as a higher risk.
- Errors on your credit report – mistakes or outdated information on your credit report can affect your application.
- Unstable employment or address history – frequent job changes or moving addresses can be seen as a risk by lenders.
How to avoid a rejected application in the future
If your application is rejected, that doesn’t mean you won’t be approved for another card in future. To give yourself the best chance for next time, here are some things you can do to improve your application:
- Avoid multiple applications – space out your credit applications to avoid negatively impacting your credit score. Too many applications done close together raises red flags to lenders. Take the time to improve your financial situation before applying for another credit card.
- Check your credit report – look for any errors or outdated information and have them corrected.
- Improve your credit score – focus on building your credit score by paying bills on time, reducing existing debt, and avoiding multiple credit applications.
- Keep a stable income – make sure you have a steady source of income that meets the lender’s expectations.
- Think about a credit builder card — these cards are designed for people with limited or poor credit history and can help you build your credit score over time.
Compare credit cards
Not only can we help you to shop around and compare credit cards, but we also offer a soft search eligibility checker. This could give you a better idea of which cards you’d be most likely to be accepted for. And as it’s a soft search, it won’t affect your credit score in any way.
Try our credit card eligibility checkerLooking for a credit card?
Compare credit cards quickly and easily. Use our eligibility checker to find out which credit cards you’re likely to be accepted for without affecting your credit score.
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The Editorial Team - Compare the Market
Experts in personal finance, insurance and utilities
Compare the Market’s Editorial Team is made up of industry experts with decades of experience in personal finance, insurance and utilities. Each of our authors has an area of expertise, where they can share their extensive experience to help you get a better deal, by finding the right product and saving money.
This article is written by a Compare the Market expert, backed by data and enhanced by AI. Find out how we ensure accuracy and quality in our Editorial Guidelines.