To build your credit, compare credit cards to choose the best one for you. Then, prove you can manage your plastic.

For anyone trying to build a solid credit history, it’s a good idea to compare credit cards before you open them. More importantly, no matter what’s in your wallet, managing your plastic responsibly can set you up for financial success later on.

Choosing the Right Credit Card

If you compare credit cards before you apply, you can assure you’re getting the one that fits your needs and spending style. There are many types of cards, from ones with lower interest rates to those that offer hotel rewards and points toward air travel, to cash back cards, and more. Try using an online card comparison tool to see the details laid out side by side. From there, make sure you read the fine print so you understand what your interest rate is, if there are annual fees, and any other perks, terms, and conditions.

Credit Limit

One of the biggest misconceptions people have is that if you carry a balance but pay on time, your credit will remain strong. While that’s partially true, the amount of debt you have has a significant impact on your score—30 percent. This is called your debt utilization rate, or how much of your available credit you are using, notes myFICO. For example, if you have a credit card limit of $1,000 and carry a $600 balance, you are utilizing 60 percent of your available credit.

Although there isn’t an official number to aim for, many credit experts advise staying below 30 percent utilization at all times, and the closer to zero, the better. Your best bet is to just pay your balances in full each month so you won’t be charged interest.

One Card Versus Multiple Cards

While there’s no magic number as to how many credit cards are ideal, you should have at least one if you want to begin building your credit history. As myFICO notes, your credit history accounts for 15 percent of your credit score. In other words, you have to use credit to get more of it, and the earlier you start, the better.

While you can certainly get more than one card, it’s not a good idea to apply for credit everywhere you go since you could easily become overwhelmed. Plus, if you open too many accounts in a short time period, it could signal to lenders that you are having some cash flow troubles, as explained out by the credit bureau Experian.

A good plan is to start with one, and then add a couple more as you get more comfortable using plastic. As long as you’re paying your bills on time every month—the most important component of your FICO score comprising 35 percent of it—you’ll remain in good standing.

All in all, if you open up a credit card but pay it off on time every month and keep the balance as low as possible, you’ll build a strong credit foundation, as illustrated by Bank of America. Compare credit cards to find the ones that are right for you, and use them as a tool rather than a way to spend beyond your means. If you manage your plastic wisely, you’ll position yourself to get the best rates on future lending transactions like auto loans and mortgages.

Dawn Papandrea

About the AuthorDawn Papandrea

With more than 15 years of professional writing and editing experience, my writing specialties are in personal finance, higher education, and content marketing. Publishing credits include Family Circle, Parents,,,, University Business, and many more. In addition, I also create branded content for several brands and corporations in the financial, retail, marketing, and lifestyle/parenting spaces. No matter the medium, I understands the value and power of content from both a writer's and editor's perspective.