20 Things to Consider Before Getting a Credit Card

11 min read

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.

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.

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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 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

bigstock Card On Credit Terms 21594392 | Stay at Home

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 your current favourite netflix show 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.

6. See how credit limit works.

20 Things to Consider Before Getting a Credit Card | Stay At Home Mum

Your credit limit will be based on two things: income level and credit score. Banks have to know your capacity to pay and that you have a good credit history. Simply put, they want to know if you pay on time and have the ability to make a full monthly payment. There are instances, when after being approved, banks will offer to your credit limit allowing you to spend even more.

We’ve all seen those enticing brochures that get sent out – funnily enough, they make you feel like the bank/ lending organisation really think you are the bomb and are awesome and SUCH a good money manager, that’s why they are now offering you a $15000 credit limit! If you don’t need it, simply don’t do it. A debt is a debt and you can always lose control.

Once you add interest to your purchases, that new lounge suite you just HAD to have that cost ‘x amount’ now is costing much more than that amount after interest is added and your payment is now over many years potentially causing a lot of unnecessary stress.

7. Know your cut-off dates and billing period.


By missing a payment due date or not knowing when your billing period is can not only cost you money, but can affect your credit status. When you make purchases, there is often a honeymoon period before the company will start to charge interest, it’s super important to know these time frames to avoid paying extra money out when it could be sitting pretty in your hip pocket. Which would you prefer?

Mark your calendar – put a bring up in your phone, anything to remind you that payment is due and you need to do that now.

8. Your credit score says a lot about you.


How you manage your credit card will affect your credit scores which are used for all the other loans that you will get later on (housing, car, etc.). Credit card companies will also check if you have outstanding loans and what your loaning history looks like before granting you a credit card and what credit limit they’re going to give you. The words to aim for are “good standing”.

9. Listen, Read, Research


Know everything that you need to know about the reputation of the credit card company or bank before you send in your application. Do it like you would on that cute guy you’ve been crushing on – except in this instance, you won’t be looked upon as a crazed stalker with issues.

10. The rewards system you shouldn’t always fall for.

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Banks may offer rewards to loyal clients. It could be in a form of free dinners, clothing,  or even travel points. They all seem so exciting – and you’re getting something for nothing right? WRONG! You may get rewards after you’ve proven to be a good payer or you may have to purchase a certain dollar amount of goods in a certain period. Understand the rewards game before you jump right in. You may not NEED to spend all that money on ski gear from ‘Snow-Is-Us Online Store’ to get the 2 for 1 meal deal at a fancy restaurant, because you actually live in the tropics and really can’t even afford a holiday to the snow for a while yet. Meanwhile, the bank is rubbing its hands together happily collecting those dollars you are paying in interest for doing nothing really. The perks don’t really come for free, remember your mother saying ‘If it seems too good to be true – it usually is.’

11. There are fees, LOTS of them!


This is where it can get discouraging sometimes as there are a number of fees attached to your credit card. There are annual and monthly fees, transactional fees and early termination fees. There are also over limit and underpayment fees, which are all self-explanatory. It is really important that you know what ones will affect you with your credit card before applying.

12. No matter what, read the fine print.


Don’t rely on the agents to tell you everything. Those illegible sentences found at the bottom of credit card application forms (those printed in five-point fonts that sometimes just look like dots) are the things that you need to know before you apply or agree to the conditions of offer. You don’t want to be caught out by a ‘Oh didn’t you read that in your contract. Its all written in there!’ phone call by a debt collection agency for example.

13. There is a huge difference between a credit card and a debit card.

woman credit card shutterstock 20140314 | Stay at Home

When you use a debit card, the amount is directly debited from your account without interest rates or charges applied, unless you fall below your savings account maintaining balance. The money is your money you already have saved to spend without having to borrow from another source. The credit card lets you purchase items using the bank’s money from which you will be charged later on with interest fees applied. Essentially, it’s debt.

14. International transaction fees vary.


With different credit cards from different lenders, there are many different fees that you may be charged on international purchases. If you are travelling overseas, make it a point to find out exactly what fees, and in what situations you will be charged for. This will help you avoid the holiday debt hangover.

15. Credit cards can be used for cash withdrawals.

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When you run out of cash and your savings account is empty, you can do a cash advance by withdrawing money using your credit card. That’s the good news. The interest rate for credit card withdrawals higher than the usual rate and is often payable immediately without the usual interest free grace period. This option really only should be used for emergencies only.

16.  What happens when you can’t pay?

20 Things to Consider Before Getting a Credit Card | Stay At Home Mum

Interest charged on your purchases will continue to be charged, you will be stung with penalty fees for overdue payments, and your credit score will take a nose dive. When you are applying for any future credit, this will impact on your ability to be approved. ‘Ain’t nobody got time for that!’  You may know you’re a good person who is good with money – but that little smudge against your name can mean a lot to others in the industry.

17. The credit card isn’t a cure.


You don’t want to be thinking about how to pay your bills while you’re on a hospital bed. It would be convenient to swipe the card and let the medical bill take care of itself. Unfortunately though, the bills don’t disappear. They hide away growing with fees and high interest rates. Experts tell people not to use their credit cards for medical bills. Ever.

18. There are risks involved when you get a credit card.

20 Things to Consider Before Getting a Credit Card | Stay At Home Mum

Unlike paying cash where you can keep track of your spending real time, using a credit card does the opposite. A lot of people have ended up with more loans than they could afford to handle. You do need good money management skills that have a lot to do with wise spending.

19. There is paperwork to be kept.


You need to keep receipts and religiously check them against your monthly statement. Bank systems are not always perfect. You might be overcharged and not know it.

20. There are teaser rates and you don’t have to jump into them right away.

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Credit card companies and banks endlessly find ways to attract new clients and keep old clients hooked. Low or no introductory rates are well-designed baits designed to lure you in. Before committing to these seemingly amazing offers like always – read the small print and ensure you’ve really considered if a credit card is the best option for you.

There is a lot to consider when it comes to getting a credit card, but the negative points don’t necessarily tip the boat over. Credit cards can be very helpful as long as you set limits and use them responsibly.

Paying on time and not going over credit limits will make your credit score look gorgeous. That is something you will thank yourself for in the future.

What other things did you think should be considered before getting a credit card?

20 Things to Consider Before Getting a Credit Card | Stay at Home Mum

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