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Choosing your first credit card is exciting! It's a powerful payment option that gives you a personal line of credit to purchase the things you need. Still, while credit cards are a great first step into the world of borrowing, and can be an important tool on your path to financial wellness by helping build your credit and even earning you rewards such as cash back, it's important to be mindful of the risks. If you can make a smart decision about your credit, you'll reap the benefits for years to come. Let's talk about how to pick the card that best fits your specific needs.

Know Your Income and Debt Situation

When applying for a credit card, you'll first have to go through a credit check, which will look at your income, credit score, and debt history. A stable income is important when getting your first credit card because it shows that you will be able to make reliable payments. And a good credit history provides lenders with evidence that you can successfully manage debt. While individual situations vary, your credit score can help you figure out your probable credit card limit.

If you've recently graduated, it's common to not have much credit at all. Credit cards can be a good tool for building healthy credit, but you may have to settle for slightly different terms than you'd prefer. If you haven't established credit yet, a secured card may be your best option. Because it's secured by a deposit, it's easier to get when you don't have an established credit history. A secured card can also help you if you need to rebuild your credit.

A credit card, such as a secured card, or a card with a lower interest rate and zero percent intro period, can also help you recover from debt. But making timely payments and paying off your balance each month is especially important if you want to successfully reduce your debt without racking up interest and build your credit score back up.

Calculate How Much You Can Afford for Monthly Payments

Knowing your take-home income is beneficial because it helps you understand what balance you can comfortably afford to pay off, and what credit card limits you should look for. Don't try to apply for a card with a limit that you would struggle to pay off based on your monthly income. Instead, take a look at your income, your monthly expenses, and what you would use a credit card for.

You may also what to consider your credit utilization rate, or what portion of your credit limit you plan on using each month. It's generally easier to build good credit with a low utilization rate — some suggest keeping it around 30 percent, but it depends on the card you get and your confidence in your financial situation.

Look at Credit Card Fees

Credit cards may involve different annual fees. When looking at credit card terms, remember to pay attention to fees you will have to pay and how they will affect your plans.

Some credit cards are available with low or no fees, such as the KeyBank Latitude card. These cards are a good choice if you're trying to pay off older debts. Due to the lower interest rate, they also make for good emergency cards that won't require long-term costs. Additionally, you can avoid certain fees, such as late fees, by making sure to pay at least your minimum amount due each month.

Check out Credit Card Rewards

Many credit cards also provide rewards and bonuses. These can vary greatly from cash rewards upon signing to earning travel miles as you use the card. Take a look at the variety of rewards that credit cards can provide and how you qualify for them. For example, KeyBank's Key2More Rewards credit card allows you to collect points for each dollar you spend,1 which you can then redeem for shopping, gift cards, cash, and more. Keep in mind that rewards may be targeted toward spending borrowers, like students or business owners.

Compare Interest Rates

The credit card interest rate is applied to the remaining balance after each payment period. It's another important factor you should ask about when comparing credit cards. You can do this easily by looking at the APR (annual percentage rate), which combines interest information for a card into a yearly rate. APRs can vary, but the average is currently around 17 percent.

Ideally, you should try to pay your full balance each month to avoid being charged interest, but if you're unable to, be sure to pay off as much as possible to limit the interest fees.

Compare and contrast different kinds of credit cards before committing to one. You'll want to make sure you're choosing the card that best fits your needs and aligns with your financial wellness goals.


Eligible purchases do not include cash advances of any type, balance transfers, convenience check transactions, overdraft protection transfers or credits. Bonuses are based on the total eligible purchase transaction points earned in a calendar month and are awarded once a month around the 5th business day for the previous month spend. If your credit limit is less than $2,000 you will need to make payments (in addition to your required payment) throughout the calendar month in order to reach the spend limits required to earn monthly bonus points. See the KeyBank Rewards Program Terms and Conditions for full details, which are subject to change and may be found at

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

By selecting any external link on, you will leave the KeyBank website and jump to an unaffiliated third-party website that may offer a different privacy policy and level of security. The third party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend or guarantee any product or service available on that entity's website.

All credit products are subject to credit approval.

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