ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Establishing Good Credit with a Credit Card

Updated on June 19, 2013

Credit unions often offer lower interest rates than banks

Don't neglect to check out the credit unions in your area.
Don't neglect to check out the credit unions in your area. | Source
Start with one and have a strategy for using it.
Start with one and have a strategy for using it. | Source

Get your first card through a bank or credit union

Learning to handle credit, whether it is a simple loan, a credit card, or a mortgage, is part of becoming an adult in our complex society. Even people who feel strongly about saving, living simply, and avoiding debt, find themselves in situations where borrowing is the wisest course of action. It is important to plan for that moment even if you don not want to become a heavy credit card user. The good news is that the only thing required to establish good credit is a little forethought and a bank or credit union.

Credit cards are commonly used to begin establishing a credit history. The best approach is to get your first credit card through your bank rather than through an offer received in the mail or through a retail store. Getting a credit card through your bank allows you to talk to someone about it before applying. Being rejected for a credit card application is a black mark and no one wants to start that way. At a bank, a loan officer should be able to tell you by looking at some financial figures whether you are likely to be accepted for a credit card with them. If not, a secured card may be suggested or you can specifically request a secured card.

A secured credit card is essentially a probationary arrangement with the bank. In this situation, the borrower places a specified amount, say $500.00, in a savings account that cannot be touched. The amount in the savings account creates a risk-free situation for the bank while helping you establish credit with your first credit card. Should you fail to make payments, the bank knows you have the money to cover any purchases. The period at which the secured status ends, assuming responsible behavior on the card-holder’s part, should be established ahead of time. Six months is common.

It is vital during that time to use the card for small purchases that are easily paid off each month. This shows you can make reasonable financial decisions and make regular payments. Failing to use the card does not demonstrate your ability to intelligently handle one. After the probationary period, you keep the same card but the money in the savings account is released. You then have a real credit card with the danger of making real mistakes that could result in bad credit instead of good credit. The best policy with credit cards is to use them sparingly and pay them off each month.

Getting a credit card through a credit union or bank is a great first step toward building a positive credit history. It establishes a valuable relationship with a lending institution that can help you with larger loans at a later date. Even before accessing your official credit score, they can see that you have been responsible handling your accounts with them. This creates a feeling of trust and goodwill that can open the road for trouble-free lending in the future.


    0 of 8192 characters used
    Post Comment

    No comments yet.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)