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Getting your first credit card can be exciting and scary at the same time. You want to start earning rewards and building credit, but you also know credit card interest rates are high, and if you’re not careful, you could end up with debt that takes years to pay off.

That’s why you should understand what credit cards are and how they actually work before applying for your first one, says Danny Cieniewicz, certified financial planner at Hyperion Financial. 

Here’s what you should know. 

Some people like the convenience, flexibility, and security of a credit card. Others use them to earn rewards for their spending. 

But the primary reason people get credit cards is to establish credit. Having a credit card and using it smartly can help build a strong credit history. Solid credit can help you purchase a home, finance a car, or qualify for the best rates on the best credit cards and other loans. 

Using a credit card responsibly and making payments on time shows you manage credit well. This positive payment history is recorded in your credit report and can improve your credit score, ultimately saving you money down the road if you have good credit. 

When you use a credit card, you’re essentially borrowing money from the issuer with the promise that you’ll pay it back later. This gives you the flexibility to pay off purchases over time, but can also lead to debt if you can’t pay your credit card balance in full each month, says Robin Snell, certified financial planner and owner of Nested Financial & Tax Planning. 

Before you apply for a credit card, Snell recommends making sure you have your financial ducks in a row and consider the following: 

When you’re first building credit, you may have fewer card options.

Most credit cards are unsecured, and often come with better perks and rewards. Unsecured credit card issuers typically approve you based on your creditworthiness and income, and are, therefore, harder to qualify for if you have a low credit score or no credit history.

If you can’t get approved for an unsecured credit card, you can start with a secured credit card requiring a cash deposit as collateral.

Secured credit cards aren’t always ideal, but they can help you build credit by reporting your on-time payments to the credit bureaus. You can get your refundable security deposit back once you close or upgrade your account in good standing.

Some secured credit cards offer rewards, including the Discover It® Secured Credit Card and the Bank of America® Unlimited Cash Rewards Secured Credit Card.

If you’re a college student, you may qualify for a student credit card with generally easier approvals and may come with rewards. Some popular student credit cards include the Discover It® Student Cash Back and the Quicksilver Secured from Capital One.

To apply for a credit card, you’ll need to provide some personal and financial information, including: 

Here’s how to actually apply for a card: 

1. Gather the required information for the application. Get all the information you’ll need for your application, including details you may not know off-hand, like your Social Security number (SSN). 
2. Fill out the application. Try to be as accurate as possible, as it will make the approval process smoother. 
3. Read over the card’s terms and conditions. Consider the card’s interest rates and fees, along with other terms. “Pay attention to the grace period, late payment fees, minimum payments, and rewards programs,” Snell says.
4. Submit your application. Once you’re sure your application is correct and you’ve read over everything, send in your application. Now it’s up to the issuer to determine whether you’re approved. Depending on the card, you may be approved instantly or will hear back in a couple of days.  

Card issuers base your credit card approval (or denial) on many factors. While card issuers might say their cards are for people with specific credit profiles, they won’t tell you exactly what qualifications you need to be approved.

If this is your first credit card and you want to maximize your chances of getting approved, consider specific unsecured starter credit cards or secured credit cards that require a refundable cash deposit as collateral.

No matter which credit card you apply for, you’ll want to use it correctly. This means using it to boost your credit score, earn perks, and avoid debt. Good card habits include: 

Getting a first credit card can be an important step to building your credit in the future. Your best bet is to approach the process with a plan that lets you benefit from credit without getting into debt. It’s wise to use your card only for purchases you can afford to pay off each month and start building positive credit habits from day one.

After all, your credit score matters, whether you like it or not.

“A good credit score opens doors to better loan terms, lower interest rates, and higher credit limits,” says Snell. “It can also enhance your chances of getting approved for other financial products like mortgages or car loans.”