How to Get a Credit Card

One of the most commonly asked questions we receive is "how do I get a Visa or Mastercard?"    If you're young with no credit history you need to create a credit history in order to get a credit card.  If you are older and have a bad credit history, you need to re-establish a good credit history by always paying your bills on time and keeping your debt-to-income ratio low. 

Millions of people established their credit rating with a department store credit card because it is much easier to get a department store card like Sears, JC Penney, etc., than it is to get a Visa or Mastercard. Unfortunately, department store credit card interest rates are outrageous, ranging from 21% to 33%. 

It is also relatively easy to get a gas card, such as Texaco, ExxonMobil, etc., but the problem with gas cards is that some of them don't bother to report your payment history to any of the major credit bureaus, which means you couldn't use the credit card to establish a credit rating in order to qualify for a Visa or MasterCard sometime in the future.  Gas credit cards also come with outrageous interest rates.

Once you get a department or gas credit card you need to use the credit card regularly and always pay your bill on time each month.  If you pay late even once you have seriously damaged your credit rating and won't be able to get a Visa or MasterCard, perhaps for more than a few years.  To avoid the high finance charges associated with department store and gas cards, always pay your bill in full each month.  Your entire purpose of using these cards is to establish your credit rating so you can qualify for a Visa or MasterCard sometime in the future, not to run up a huge amount of debt.  How long will it take?  Six months to a year for most people.  Just make sure they are reporting your payment history to your credit report.  If they aren't, you're wasting your time.
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The basic qualifications to get any type of credit card are as follows:

(1)  you must be at least 18 years old;
(2)  you must have a job or income; 
(3) you should have a checking account and a savings account just so you can check "yes" on the credit card application where it asks you if you have these accounts;
(4) you should have a telephone in your own name;
(5) your monthly expenses (rent, car payment, insurance, etc.) shouldn't eat up more than half of your monthly income. 

To qualify for a Visa or MasterCard, one must usually have at least an annual income of about $14,000.
The Card Act passed a few years ago by Congress limits credit card companies from giving those under 21 years of age a credit card without a cosignor UNLESS they can prove that they have a job, live on their own and support themselves independent of their parents.  If you are under 21 years of age and do not support yourself or are a college student, you will probably have to have a parent co-sign for you in order to get a credit card.

If you want a Visa or MasterCard now, consider applying for a secured credit card.