If you are a college student or a recent graduate, you may find yourself bombarded with credit card offers. Most students simply fill out a credit card application, cross their fingers and hope for the best and then wait to hear if they are accepted. Many students are just happy to be approved and get their own credit card; they don’t care what bank it comes from.
However, the decision should be weighed carefully for several reasons. Once you have a credit card, you have begun to develop a credit history and a credit score. If you later decide to close your first credit card line, you risk having your credit score temporarily lowered since a portion of your credit score is determined by how long you have had lines of credit open.
In addition, if you have too many credit cards and credit limits that are too high, that can also count against you in the future when applying for car loans and home mortgages because the lender may see each line of credit as a potential line of credit you could run up and increase your debt load. For this reason, it is best to limit yourself to two or three cards, despite the many offers you may continue to receive.
Rather than just filling out the first application you receive, take time to research the best credit cards. Determine what is most important to you. Are you looking for a card with no annual fee? One that has generous cash back rewards? One that will allow you to earn travel miles? Determine your needs first, do your research, and then apply. You will be much more likely to have a card that you can keep for many years to come, and you won’t have to worry about affecting your credit score.
Guest Post by Melissa