Published March 02, 2011
Dear Credit Card Adviser,
I've never handled a credit card before. I'm used to using a debit card just so I know how much money I can spend. I need to build my credit, but I'm scared to pick which credit card company to use since I'm a newbie. If you can help, I would really appreciate it.
Don't be nervous. Paying on time each month and lightly spending on your new credit card will help you build credit. You can even pay your balance in full each month and still improve your credit score. Your score won't reward you for paying interest charges.
Since you won't build a better credit history with one issuer over another, I'd focus more on the costs of the cards you're comparing.
Based on your question, it sounds like you have little to no credit history. If that's the case, it means you won't be getting approved for cards requiring "good" credit. To get an idea of where your credit score stands, try our FICO score estimator -- it's free.
For now, you'll likely have to get a card that is priced for higher-risk consumers. Cards in this credit category tend to have lower credit limits, high interest rates and even annual fees. I would look for a card that reports to the three major credit bureaus, has no or low fees and a reasonable interest rate in case you carry a balance from one month to the next. Here is an overview of the card types available to people with limited or no credit history.