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5 questions to ask when choosing your first credit card

Credit cards can be a useful life tool in your twenties and beyond-if you use them responsibly. If you're considering opening your first credit card, it’s important to do your research. Try asking yourself these five questions as a starting point to help find the card that's right for you.

1. Do I need a charge card or a credit card?

Charge cards and credit cards both allow you to make purchases without having to pay immediately, but there's one important difference to keep in mind:


  • Credit cards offer a revolving line of credit, meaning consumers may carry a balance from month to month rather than having to pay the balance in full every month. Each time you use a credit card, you are essentially taking out a loan, and card issuers require a payment of at least the minimum amount due be paid by the due date every month. Interest charges typically accrue on amounts charged.


  • Charge cards are a type of credit card that require you to pay the full amount you've charged each month. There are no periodic finance charges, and charge cards often come with the ability to earn rewards based on spending behaviors.
Guide for choosing first credit card

2. What's the annual percentage rate (APR)?

The annual percentage rate (APR) is the annualized rate of interest you'll pay on your credit card if you carry a balance. Your individual credit profile, spending and repayment practices will influence what your interest rate is and it is likely to fluctuate occasionally overtime. Your APR depends on your credit score and the type of card you get. A higher APR means you'll pay more interest if you carry a balance, which is something to keep in mind as you shop around for your first credit card.

3. Is there an annual fee?

Get a brief of annual fees

Part of being a responsible cardholder is understanding how card fees work. It’s important to read your Cardmember Agreement and file it in a safe place in case you need to refer to it. Many credit cards carry an annual fee. This is a fixed amount you pay each year to keep your card account open.


If you're younger and just starting out with credit, an annual fee may be something you want to avoid. On the other hand, you might be comfortable paying an annual fee for a card that offers premium benefits or perks.


If you have any questions you can call your card issuer to clarify terms and conditions.

4. Is there a rewards program?

If you're a regular credit card user, a rewards card has the potential to save you money. The key is to choose a card that offers the type of rewards that best match your spending habits and lifestyle.


Some credit cards offer cash back rewards, which allow you to earn cash back in the form of a statement credit for a percentage of what you spend. Other rewards credit cards may offer points, or miles on purchases instead.

Reward points for credit cards

5. How likely am I to be approved?

Some cards require excellent credit to qualify while others are geared towards first-time credit card users. Checking your credit report before you apply can help you target your search to cards that fit your credit profile. Note, some of these sites may charge a fee in order to calculate your credit score. Find out more about how to manage and protect your credit profile.

Choosing a card can be confusing, especially if you're new to using credit. Learn more about the Blue Cash Everyday® Card from American Express to help you get started.

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