Americans have a love-hate relationship with their credit cards. One the one hand, they use them to pay for almost everything. On the other, they hate the 20 percent-plus interest rates. 

Why does anyone need a credit card? After all, new technologies offer nearly free pay options – from smartphone apps like Apple Pay to money transfer platforms like PayPal, Venmo and Cash App. These all look like a much better deal than the 20 percent interest on many cards.

There are still important reasons to get a credit card. First, they offer actual credit, not just a way to transfer money you already have. Second, they allow users to build the credit profiles they will need later to secure mortgages and car loans.

Applying for a card can be really confusing. To provide some guidance, here are our answers to five common questions.

1. When did you get your first credit card?

I got my first card after high school. My college had a deal with a bank to offer cards with low credit limits and high interest rates. While that wasn’t a great deal, at least the card was emblazoned with the school’s name and a picture of its mascot. 

2. When do you think someone is ready for a credit card?

You need a certain emotional maturity, especially in terms of impulse control, to have a card and not run it up disastrously. If a person can manage a checking account with a debit card, it’s a sign that they will be able to manage a credit card without self-destructing, too.

3. What advice would you give to someone who is signing up for their first credit card?

Shop for the lowest interest rate. Many people do not understand that making the minimum payment on a card with a 20% interest rate will lead them to pay many times what they originally borrowed on the card. A low rate is much more important than gimmicks like “cash back” bonuses or frequent flyer miles. Banks offer those because they make a killing on the interest. 

4. What kind of obstacles can one expect when signing up for a credit card?

If you do not have a job, and have never had one, there is a good chance you will have to choose among unattractive cards. If necessary, accept a high-rate card, and charge a very small amount of money on it – say, $30 or so. Then, cut it up with scissors and throw it out. Make the monthly minimum payment for a year. After that, pay it off. You will have started building a credit record that will help you get a more attractive rate on a new card in a year.

5. If one keeps getting rejected, why might that be the case? Do you have any tips?

A poor credit score is the main reason people get rejected, and poor scores come from not having a history of making responsible credit payments. It might be no fault of yours. You might just be starting out. One approach is to get a secured credit card. These do not check your credit. They require you to make a deposit, and the size of that deposit becomes your credit limit. These tend to have eye-popping interest rates, so if you go this route, take the same approach described in question four. That should give you the credit history you need to get a normal, unsecured card.

Good luck!