Tips for first-time credit card applicants


Consumer Reports money experts say that even if you are able to get a credit card when you have little or no credit history, the cards are often a bad deal.

"These can have huge start-up costs, big maintenance fees and giant interest rates," said Consumer Reports Senior Projects Editor Mandy Walker.

The Matrix Card by Discover from Continental Finance has a $75 annual fee, plus a $12 monthly fee that kicks in after the first year.

The First Premier Bankcard has a very high annual percentage rate (APR) of 36 percent.

"One of the best options for a first-time cardholder is to get a secured card," said Walker. "It'll require a security deposit that's generally equal to your credit limit."

The Capital One Secured MasterCard is better than many. It has an annual fee of $29 and its APR is currently 22.9 percent. And it has a low late fee of no more than $19.

"If you get a card and establish a good payment history for a year to a year and a half, you can then ask for another one with better terms," said Walker.

Developing good habits with your first credit card can spare you a lifetime of financial grief. Make a point of paying off the balance every month. That way you won't get buried in debt and end up paying a lot of money in interest charges.

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