Nowadays, it seems that credit cards have become a necessity. It might be because they are very convenient and easy to use. You can just bring one card and save yourself from bringing a lot of cash with you.
This piece of plastic, however, also needs a lot of responsibility to handle. It can also bury you in debt or open doors for better opportunities. It all depends on how you use it.
Before getting your hands on one, take these following points first to guide you in choosing the right card.
First, ask yourself if you really need one. It’s good to build up your credit score early in life but it’s also a big responsibility to maintain one.
Study your financial status and see to it that you can maintain a card. Look for companies that will give you the best deal among others. Don’t rush in without exhausting all options available to you.
Remember that when you start using one, it will reflect in your credit history and it could affect future transactions.
Usually, it’s during college that many people get their hands on their first credit card. However, many students misuse credit cards, getting into more debt while they’re still in college. The new Credit Card Act increased the restrictions for issuing credit cards to students.
If you’re under 21, you need to confirm that you can generate your own income before banking companies issue your card. Even a part-time job will do, as long as your income can sustain the use of the card. No more mom and dad to rescue you when in trouble.
If you’re over 21 and have a job with stable income, it’ll be much easier to apply for a card. Just consult with your chosen credit company and present the required documents.
Picking the right card
Choose what kind of credit card you need and afford. There are those made for students and those that are specialized for certain stores.
For starters, a student card could be an option. Carefully choose the right one that offers low rates and fees. Some companies can be tricky in their offer, making young adults believe it’s specially made for them.
There are also stores that offer exclusive credit cards, or retail cards, to their customers. The downside is you can only use them in that store or in subsidiaries of that company. They also have very high interest rates which could be costly if not cleared on time.
The right credit company
Of course it would be best to choose one that is stable and offers the best terms. Low interest rates and miscellaneous fees are ideal.
Also, it would be great if you can find one that is quite flexible and lenient. If some kind of emergency comes up, you can renegotiate the payment terms and avoid getting into more debt.
Interest rates and other charges
Everyone is looking for that ideal deal – low interest rates, no annual fees and ample benefits. But it’s impossible to get the best of all three. What you can do is compromise.
Choose the deal that will be best for your lifestyle and ability to pay. For students, an ideal card would be something that has low interest rates and no annual fees.
Study the terms of payment indicated in your credit card contract. Look for additional fees for late payments, the annual interest rate, and other miscellaneous fees. You would want to know everything there is in your card before finally signing for one.
There are several dos and don’ts in handling your credit cards. It could be the difference between getting into debt and having a positive credit rating.
It’s better if you can pay off your bills the shortest time possible. Spend only the amount you can pay. Payment delays will just increase your credit making it harder to clear.
Use your card wisely. Learn how to budget. The indicated credit limit doesn’t mean you need to reach it every time you use the card.
Be wary where you use your card. Fraudulent activities are rampant especially in the internet, so be careful when doing online transactions.