A credit card can be the best and the worst thing you can have in your life; your ticket to heaven or hell.
It can one day stand as the pillar holding up the roof for you, and another day, the hammer that comes pounding every bit of you. Getting a credit card is a major decision to make, and how it’s going to work for or against you will depend on how well you understand the ins and outs and how you use it.
Maybe you’d want to do some self assessment or soul searching first? Besides, money is no small matter. Hope these 20 things to consider before getting a credit card will enlighten you!
1. How well do you know yourself?…and your spending habits.
There are two questions you need to ask yourself before signing a credit card agreement: “How badly do I need a credit card?” and “Am I good at paying bills on time?”
There are people who feel compelled to get credit cards – it seems everyone else has one, agents won’t stop sending e-mails or the entire clan deems it is a must-have to survive. A credit card can offer convenience and helps make ends meet when you have mouths to feed and payday is still two weeks away. There are different reasons for different people to have a credit card. Know yours. If you’re getting a credit card to satisfy the compulsive shopper in you, don’t. Being honest to yourself about being a good or bad payer will also help determine what kind of relationship you will have with a bank.
2. Because you’re a big spender, credit card companies and banks want YOU!
When you spend through credit, you’re basically using the bank’s money then you pay for it later plus interest. Your huge purchases mean they can make money by doing nothing but letting you shop. Easy money for them.
3. The bombardment in your inbox does not mean you automatically qualify.
You may be getting e-mails in your inbox and mailbox from banks but it still means you have to go through a qualification process. One way of knowing that you reach the required credit score is by checking for free on creditscore.com.au. If you don’t match up the credit score limit, save yourself from stress by not sending in your application. Spend some time working on your credit score first. A credit card application rejection can in fact make it harder to get credit in the future.
4. Understand Annual Percentage Rate (APR) by heart
APR is the annual interest that you pay for borrowing money. The way to prevent it from ballooning is by paying your monthly fee in full. Banks offer a grace period for the APR, which means they won’t charge you anything for a number of months. Sooner or later though, you will be charged for interest. To save yourself from shock, know until when the grace period is for your APR.
5. Interest rates should INTEREST you…like when the new season of Game of Thrones is starting.
APR, purchase charge, penalty interest and cash APR are a few terms enough to confuse the daylight out of you. They all mean the same thing though, that you will be charged for any purchases you make using your credit card. If you’re set on getting a credit card, make sure you do take the time to understand the lingo, so you don’t overlook the little things you could be charged for.