February 04, 2014 · Credit, Education

A Young Adult's Guide to Credit Cards

As a young adult, it is essential to establish a good credit history. One of the easiest ways to do this is with a credit card. However, if you don’t have a record of paying bills, such as a gas or electric bill, then you probably don’t have a credit score and may have a hard time qualifying for a good credit card. Fortunately, Delta Community Credit Union Credit Cards are a great option for those of you who may be in this very situation. 

Applying For a Credit Card

Not only is choosing the right card an essential step, but it is also important to use your credit card responsibly. Here are the most important factors to remember when applying for a credit card.

  • Applying for multiple credit cards can hinder your chances of being approved. Many people make the mistake of applying for lots of cards in a short period of time in hopes of being approved for at least one. But it's important to know that one of the factors in determining your credit score is how many times you’ve applied for credit in the past. Applying for multiple cards, loans or mortgages in a short period can thwart your chances of being approved. Therefore, it's important to remain sensible with your credit card applications and only apply for those you really need or plan to use. 
  • The average age of your accounts is another important factor to consider when applying for a credit card. This number is calculated by averaging the age of all the accounts listed on your credit report. Too many new accounts can lower your average account age which can have dramatic impact on your score. So be wary not to open and close too many accounts. 
  • Utilization is one of the biggest contributing factors to your credit score and it is determined based on how much of the credit currently available to you is in use. In order to maintain a good credit score, it is best to keep your utilization below 40% but it should not be 0%. If your utilization is above 50% then lenders may consider you at risk and refuse to extend credit to you.