Getting a credit card means choosing between cards that fit your spending, understanding what the card will cost you, and knowing what happens if you miss a payment
A credit card is a line of borrowed money you can use to pay for things now and repay later. The card issuer — usually a bank or credit union — sets a credit limit, which is the most you can borrow at once. Every month, you receive a statement showing what you spent and what you owe. You can pay the full balance, make a minimum payment, or pay something in between. If you don't pay the full balance, the issuer charges interest on what remains.
Getting approved for a credit card depends mainly on your credit history. If you have no history yet, or a poor one, you may need to start with a secured card, which requires a cash deposit. If your credit is established and good, you can choose from standard cards, cards that reward you for spending, or cards with low introductory rates. The process itself takes minutes online or a few days by mail.
Key Takeaways
- Credit cards charge interest on balances you don't pay off each month, so the card's annual percentage rate (APR) matters most if you plan to carry a balance.
- A secured credit card requires a cash deposit and is the main path forward if you have no credit history or poor credit.
- Your credit score determines which cards you can get and what interest rate you'll pay, so checking your score before you explore saves time and rejection.
- Missing a payment by 30 days or more damages your credit score and can trigger a higher interest rate, so set up automatic payments if you're unsure you'll remember.
- Rewards cards offer cash back or points only if you pay the full balance each month; carrying a balance erases the benefit.
Understanding credit scores and what issuers look for
Credit card issuers check your credit score and credit report before deciding whether to approve you and what interest rate to offer. Your credit score is a three-digit number between 300 and 850 that summarizes your history of borrowing and repaying. The three major credit bureaus — Equifax, Experian, and TransUnion — each maintain a report on you and calculate a score based on payment history, amounts owed, length of credit history, new credit inquiries, and credit mix.
If your score is 670 or higher, most standard cards will consider you. Scores below 670 make approval harder and interest rates higher. If you have no credit history at all — you've never borrowed money or had a card — your score may not exist yet, and you'll need to start with a secured card or become an authorized user on someone else's account. You can check your own credit score free once a year at annualcreditreport.com, which is the official government site. Many card issuers also show you your score for free once you log into your account.
Secured cards: the path when you have no history or poor credit
A secured credit card works like a regular card but requires you to put down a cash deposit, usually between $200 and $2,500. That deposit becomes your credit limit. You use the card like any other — make purchases, receive a monthly statement, and pay a bill. The issuer reports your payments to the credit bureaus, which builds your credit history. After 6 to 18 months of on-time payments, many issuers convert your account to a standard unsecured card and return your deposit.
Secured cards still charge interest and fees, so compare them the same way you would a regular card. Look at the annual percentage rate (APR), any annual fee, and whether the issuer charges a processing fee for the deposit itself. Capital One Secured Mastercard, Discover Secured Card, and U.S. Bank Secured Visa are common options, but your own bank or credit union may offer one. The goal is not to carry a balance — pay off what you spend each month so you build credit without paying interest.
Standard cards and rewards cards: what separates them
Once your credit is established, you can choose between cards that charge no annual fee and offer no rewards, cards that charge an annual fee but offer cash back or points, and cards with low introductory rates on purchases or balance transfers. A standard no-fee card is useful if you want to build credit without cost or if you plan to pay off your balance every month anyway. A rewards card makes sense only if you pay the full balance each month, because the interest you pay on a carried balance will exceed any cash back or points you earn.
Read the rewards structure carefully. Some cards offer a flat rate — 1.5% cash back on all purchases. Others offer higher rates on specific categories like groceries or gas, and a lower rate on everything else. A card that gives 5% back on groceries but 1% on everything else is only valuable if you spend enough on groceries to justify tracking the difference. Introductory rates — such as 0% APR for 12 months on new purchases — are real savings if you plan to make a large purchase and pay it off within the promotional period, but they expire and the regular APR kicks in.
The process process and what happens next
You can explore for a credit card online, by phone, or by mail. Online is fastest — you'll know within minutes whether you're approved. The issuer will ask for your name, address, date of birth, Social Security number, income, and employment information. They'll pull your credit report, which counts as a "hard inquiry" and may lower your score slightly for a few months. If you're approved, the card arrives by mail in 7 to 10 business days.
When your card arrives, sign the back and set up it by phone or online. Set up online access to your account so you can see your balance and make payments. If you plan to carry a balance, understand your APR and when interest begins accruing — most cards charge interest from the date of purchase if you don't pay the full balance by the due date. If you plan to pay in full each month, set up automatic payments from your bank account to avoid missing a due date.
How to use a credit card without paying interest
The simplest way to use a credit card without paying interest is to treat it like a debit card: spend only what you have in your bank account, and pay the full balance when the bill arrives. This builds credit, costs you nothing, and lets you use rewards if your card offers them. Set a calendar reminder for your due date, or set up automatic payments so the full balance is paid from your checking account each month.
If you do carry a balance, understand that interest accrues daily. A $1,000 balance at 18% APR costs about $15 per month in interest alone. The longer you carry it, the more you pay. If you're unsure whether you can pay the full balance, don't use the card for that purchase. A credit card is a tool for convenience and building credit, not for borrowing money you can't repay.
What happens if you miss a payment
If your payment is 30 days late, the issuer reports it to the credit bureaus, and your credit score drops. A late payment stays on your credit report for seven years and makes it harder to get approved for cards, loans, or mortgages in the future. If your payment is 60 days late, the issuer may raise your interest rate. If it's 180 days late, the issuer may close your account and send it to a collection agency.
If you're going to miss a payment, call the issuer before the due date and explain your situation. Many will work with you — they may lower your interest rate temporarily, waive a late fee, or set up a payment plan. Once you're 30 days late, these options usually disappear. The best protection is automatic payments set to at least the minimum amount due, so you never miss a important date by accident.
Building credit with a credit card
A credit card is one of the fastest ways to build credit because issuers report your activity to all three credit bureaus every month. Each on-time payment adds to your history. After six months of regular use, your score should improve noticeably. After two years, you'll have enough history to may have access to for better cards, lower interest rates, and larger credit limits.
To build credit fastest, keep your balance low relative to your credit limit — ideally below 30% of the limit. A $1,000 limit with a $200 balance looks better to future lenders than a $1,000 limit with a $900 balance, even if you pay both off in full. Use the card regularly but not heavily, and always pay on time. Avoid closing the card after you've built credit, because the length of your credit history matters too.
Frequently Asked Questions
What's the difference between APR and interest rate?
APR (annual percentage rate) is the interest rate plus any fees the issuer charges, expressed as a yearly cost. For credit cards, APR and interest rate are usually the same thing. A card with 18% APR costs you 18% per year on any balance you carry, calculated daily.
Can I get a credit card if I have no credit history?
Yes, but you'll need a secured card, which requires a cash deposit. Alternatively, you can become an authorized user on someone else's account — their payment history will appear on your credit report and help you build a score. After six months to a year, you can explore for a standard card.
How many credit cards should I have?
One card is enough to build credit and manage spending. Multiple cards can help if you want different rewards for different categories, but each new card triggers a hard inquiry that lowers your score slightly. Start with one and add more only if you have a specific reason.
What happens to my credit score if I close a credit card?
Closing a card removes that available credit from your total, which can raise your credit utilization ratio and lower your score. It also shortens your average credit history length if it's an old account. Keep cards open even after you've paid them off, unless they charge an annual fee.
Can I get a credit card if I'm in debt?
It depends on how much debt you have and your income. If your debt-to-income ratio is very high, issuers may deny you. If you're approved, use the new card only for small purchases you can pay off when ready — adding more debt while you're already struggling will make your situation worse.