Applying for a credit card is a big decision, one that shouldn’t be taken lightly. If you don’t yet have a credit card and you’re thinking about applying for one soon, you need to think long and hard about whether you need one, and if you decide that you do, you then need to do your research to find the best credit card for you.
Should I Get a Credit Card?
This is a big decision, so give yourself plenty of time to work out whether you need one or not. What’s more, don’t apply for a credit card until you’ve gained an understanding of the different credit card types and you’ve decided which one best suits you and your personal situation. To decide whether you need a credit card, ask yourself the following questions:
- How much do I earn and will I get approved for a credit card?
- What are my expenses and do I regularly have money to spare?
- Do I have dependents, a car or other major expenses to consider?
You need to be sure that applying for a credit card is in your best interests and that it isn’t going to be a source of problems. Many people have got themselves into serious financial trouble as a result of racking up debt on their credit cards, so above all else, make sure you can make your repayments.
Moreover, use your credit card sensibly, for example, you should pay your insurance premium by credit card and use it for emergencies when they arise, but don’t use it for spur-of-the-moment purchases. That’s how debt spirals out of control and become very difficult to rein in.
What’s the Right Card for Me?
There’s a wide range of credit cards that you could apply from, with most banks and lenders offering a similar variety of credit cards, for example, interest-free period credit cards and no-interest free period credit cards. Credit cards with an interest-free period usually have higher annual fees and interest rates than cards without interest free periods, so you need to work out which of these cards is the right one for you to ensure you apply for the right one. Ask yourself the following questions:
- Will you repay what you spend on your card by the end of the month? If you do, an interest-free credit card may be right for you. However, if you won’t, opt for a regular credit card with no interest-free period.
- Will you make large purchases with it? If you’re planning to make a large purchase, for example, pay for overseas flights and repay the amount over a few months, then don’t apply for an interest free card as they have higher interest rates.
As mentioned earlier, applying for a credit card is a big decision to make and you want to ensure that you actually need a credit card and that you’re applying for the best credit card for you. Additionally, don’t rush, take your time and perhaps speak to an adviser at your bank in person before applying.