How to choose a good first credit card

Getting your first credit card can be a solid step toward building your own financial foundation. Why? A credit card is often a necessity in adult life, helping you do things like buy a plane ticket or rent a car. But most importantly, a credit card can help you build credit. 

But it’s important to navigate when you get a credit card. Applying for one too soon—say, before you’re on a solid budget with a job or while you’re in college and have other bills to pay for—can lead to unexpected debt. Waiting too long, and “when it’s time to take out a car loan or get a mortgage, a lot of people have this huge hurdle in spite of financially responsible habits,” says Emily Thompson at The Points Guy. 

When you build credit responsibly you also contribute to a higher credit score. That, in turn, helps establish you as a trustworthy candidate for future loans for larger purchases or loans for cars and homes. Here’s what to consider as you think about when to get your first credit card, and which card to apply for.

Even though it sounds counterintuitive, you need to review your credit report before you ever apply for your first credit card. Because some cards are only available to people with good or excellent credit, you may end up wasting your time by applying for cards you won’t qualify for. 

When you first check your credit report, you’ll see a history of prior credit behavior. If you have student loans, for example, you should see them. If you don’t — and you’ve never borrowed before — you may not have a credit report. That’s not something to be alarmed about. Read the report carefully for any inaccuracies and dispute them with the credit bureaus if you find them. 

Next, take a look at your credit score. A credit score is a three digit number that typically ranges from 300 to 850. Your credit score is based on information in your credit reports, and the three main credit reporting bureaus (Experian, Equifax and TransUnion) gather information for your credit file from financial institutions and public records. 

Your credit score helps banks and other businesses decide how much of a financial risk you are. It’s based on your history as a borrower, along with several other patterns of financial behavior. If you have a low score, it can indicate to a lender that you could be more likely to pay late or default on a loan. Conversely, the higher your score, the better the rates you’ll qualify for with mortgages, auto loans, credit cards, and other types of loans. 

Again, if you’re new to credit, there’s a chance you won’t have a score at all. Don’t let this discourage you. While this means that while you likely won’t be eligible for anything but a starter card to help you build credit. 

“It's important to adjust your expectations, because a lot of what we think of with credit cards, in terms of rewards and things like that, just aren't going to be available to you on that first credit card,” says Matt Schulz, Chief Credit Analyst at LendingTree. But that’s okay; the goal right now is building your credit and paying your bills on time, every time. The rewards can wait.

Ever heard of a secured credit card? For people with little to no credit history, secured cards can be a great way to start building credit. Essentially, the way secured credit cards work is that you put down a deposit—let’s say $500—which then becomes your credit limit for that account. Because your limit comes directly from a deposit you put down when opening the account, there’s virtually no risk to the bank, which means almost anyone can get approved. 

“I'm a big fan of secured cards for somebody's first card, because they minimize the risk to everybody involved,” Schulz explains. “Secured cards can be a great stepping stone but it's also something that you shouldn't have for all that long.” 

The only downsides are that once you deposit money into your credit account, you can’t then use it for other things, and you also can’t increase your credit limit without putting more money down. So while secured cards can be great if they’re the only credit card option you qualify for, you may want to upgrade to a traditional credit card after you’ve established a track record of a year to 18 months of on-time payments.

Now that you know how credit cards work, it’s time to choose your first card. “There's not a one size fits all answer for what the best credit card is,” Schulz says. “It really is about what you want from the card, how you spend on the card, and how comfortable you are with managing your credit card.” 

Start by focusing on the cards available for someone with your credit score, and then compare everything about those cards, including interest rates, fees, any rewards offered, and other perks. Whatever you do, do not fall into the trap of going into credit card debt to earn rewards. You’ll pay more interest than you earn.

Getting approved for your first credit card is only the beginning. In order to build good credit, focus on paying every bill on time, and paying your balance in full. 

A version of this article originally appeared on HerMoney.