Getting a credit card is a big financial step. A credit card gives you the flexibility and freedom to make purchases with loaned money. Some credit cards even offer rewards. And you can find different credit cards, with different perks, by searching online.

But before you apply for a credit card, it’s important to understand what you’re getting into. You need to know which credit cards are the best options for you, and what you’re applying for. Luckily, you can discover plenty of credit cards with an online search right now.

If you’re about to apply for a credit card, make sure you know the following five important facts first.

1. Your Options Will Be Limited If You’re a First-Time Applicant

If you’ve never had a credit card before, you need to know that your options will be limited when applying for one. People with limited credit histories or no previous credit cards can find it a bit difficult to apply and qualify for many credit cards.

And that’s because the best credit cards actually aren’t designed for first-time cardholders¹. If you haven’t had a credit card before, you likely won’t qualify for the most valuable credit cards available. And that means you’ll have to miss out on the cards with high rewards, great perks, and even sign-up bonuses and 0 percent interest periods.

The best, or most desirable, credit cards are only made available to those with good or excellent credit and longer credit histories². They also typically require certain income levels.

Instead of trying to apply for these popular credit cards, shoot for lesser-known cards. You can look for credit cards designed for people with limited or no credit histories, such as student credit cards or secured credit cards. You can also try to pre-qualify for cards to make the application process easier.

2. Different Credit Cards Offer Different Benefits and Perks

Choosing a credit card is one of the biggest decisions you’ll make in the application process. There are so many different credit cards available, and each one is different. That means you need to narrow down your options before you can even start looking at a credit card application.

There are many different types of credit cards. But the type you choose will determine how you can use your card, if you earn certain rewards, and whether or not you pay high costs to keep the card.

You can choose from the following types of credit cards³:

  • Balance transfer credit cards. These cards allow you to transfer credit card balances to a new card and save on interest.
  • Cash back rewards credit cards. A credit card that offers cash back at a set percentage on any eligible purchases.
  • Gas rewards credit cards. These credit cards let you earn cash back in the form of gas rewards with each purchase.
  • Retail credit cards. These cards are offered by specific retailers and let you earn points for purchases at that particular store.
  • Secured credit cards. These credit cards require a cash security deposit, which is typically also your credit limit.
  • Student credit cards. Designed for students, these are starter credit cards for those with limited credit.
  • Travel rewards credit cards. These cards let you earn miles or points that can be redeemed for travel purchases, like fights or hotel stays.
  • Unsecured credit cards. Suitable for anyone with fair to excellent credit, these cards are the most popular kind of credit card.

The credit card that’s right for you will depend on your financial situation. Make sure to consider factors like where you plan to use your credit card the most, the types of purchases you make most often, and if any particular rewards or perks are important to you.

3. Your Credit Card Will Directly Affect Your Credit Score

It might sound obvious, but before you apply for a credit card, you need to know that it’s going to affect your credit score. However, credit cards can have a more surprising impact on your credit than many people think.

Your credit score will be affected the second you actually apply for a credit card⁴. Even if your application is denied and you don’t qualify for a card, your credit score will still see an impact. That’s because applying for a credit card adds a hard inquiry to your credit history, which shows that a lender was considering lending you money. That hard inquiry will stay on your credit report for two years and will affect your score for a few months⁵.

But applying for a credit card can also positively affect your credit score. If you qualify, you’ll increase your credit mix and add a new line of credit to your report. And that can help improve your score by showing a better mix of types of credit as well as more available credit, increasing your credit limit in a good way⁶. And if you make on-time payments as you use your new credit card, your credit score can increase. Payment history accounts for 35 percent of your total FICO score – so making on-time, regular payments will give you a good track record and benefit your credit score⁷.

Just make sure you know how your new credit card might affect your credit score and history before you apply. Responsible card use can be a good thing for your financial track record.

4. You Can Check Interest Rates and Fees Before You Apply

Credit cards can become expensive and difficult to repay if they have a high interest rate. Your interest rate can add anywhere from a few dollars to hundreds of dollars extra onto your monthly credit card bill. And if your card also includes fees, such as an annual fee, that can increase your costs even more.

That’s why it’s so important to consider a credit card’s interest rates and fees before you start filling out an application. Fortunately, you can check to see what the interest rate and fees are before you become a cardholder.

Credit card companies are required by law to disclose things like interest rates and fees to potential cardholders before they apply⁸. You’ll have to look at the actual application in order to find this information, though.

Look for a table or box on any credit card application. You can also look for a link labeled “rates and fees” or “pricing and terms” to find it⁹. There, you should be able to clearly see the credit card’s annual fee, APR (annual percentage rate), foreign transaction fees, and any late fees. Make sure you seek this information out and read it carefully so your new credit card doesn’t come with any expensive surprises.

If the fees and interest rate for a card you’re interested in are too high, you can keep searching. You can find other credit cards online that are more suited to your financial situation and needs.

5. You Need to Shop Around and Compare Different Credit Cards

Whether you’re applying for your very first credit card or your tenth credit card, there’s one thing everyone should do. You need to search online, consider different credit cards, and compare what they offer.

No two credit cards are the same, and neither are fees, interest rates, and rewards or perks. That’s why it’s so important to compare different credit cards. You should know what you’re getting into when you apply for a credit card – and the best way to do that is by searching online to learn more. You can look at the requirements for credit score and income, compare annual fees, and look at current interest rates before applying.

Then, after shopping around and comparing cards online, you’ll be prepared and informed. And you’ll be ready to start your application for the best credit card for you.