Getting your very first credit card can be an exciting proposition. Like buying your first car or renting your first apartment, it?s one of those ?rites of passage? that make you feel like you?ve truly achieved adulthood.?
However, with that newfound freedom comes the attendant responsibility ? to learn how to use your credit card wisely and build up a good credit score over time. Doing this can benefit you in a number of ways further down the line, including helping you get approved for a mortgage or a loan. That?s why it?s important that you take your credit card seriously; and that includes doing your research before you apply.?
With that in mind, here are some of the most important things you should consider before filling out your application form to ensure you make the most of your new card and the opportunities it can afford you.
1. Choose The Right Option For You
You may not realize it when you first think about applying, but there are a large number of credit card options available to you. While this can make the application process seem more perplexing, it?s actually a good thing, as it means you can compare and contrast different cards and choose the right one for your situation.?
Here are just a few of the cards you can choose from.
A Retail Card
If you tend to frequent a particular department store and make regular purchases there, then it may be worth your while to take out a store credit card with that retailer. This type of credit card is beneficial in that they tend not to have any strict requirements to qualify, and you can also take advantage of card holder discounts. However, retail credit cards can also come with a ?price? in the form of high APR, so do some research before committing.
A Secured Credit Card
Arguably the best type of credit card for anyone new to the world of credit, secured cards require you to pay a cash deposit that matches the credit line of the card. As long as you can pay this amount ? (buy xanax in mexico city) proving you are ?low risk? ? you shouldn?t have any trouble proving your eligibility for this type of card. Once granted, you can take advantage of the card?s various perks, which can include a rewards program.
A Student Credit Card
This type of credit card is ideal for college students. They usually require no initial credit and, in some cases, come equipped with rewards programs and bonuses for regular expenses, including food and gas.?
2. You Need To Check The Terms And Conditions Carefully
When you apply for the credit card you prefer, it?s crucial that you read through all of the terms and conditions carefully to avoid any unpleasant surprises further down the line.?
In particular, you should check the APR (or annual percentage rate), which may rise if you make any late payments. You should also be aware of any fees you may incur when you take out the credit card ? for example, does it have an annual fee, or an over-limit fee? ? and familiarize yourself with important policy details, such as payment dates and whether or not your chosen card has a grace period.
3. Each Time You Charge Your Card You?re Taking Out A Loan
Perhaps the most important thing to bear in mind before taking out a credit card is that, every time you decide to use it, you are effectively taking out a loan ? and you need to be able to repay that loan in a timely fashion. As a result, it?s a good idea to take a long hard look at your finances and your earnings before committing to a card.?
You should also consider setting yourself a budget, to prevent yourself from overcharging the card if you do decide to take the plunge.??
4. Keep Track Of Your Credit Utilization?
As someone new to the realms of credit, you may wonder how much of your credit card you should use once you have it.?
While there is no one-size-fits-all answer, as it will vary depending on the card?s credit limit, you can find plenty of in-depth information using Tally?s guide, which should help you find that happy medium between spending too much ? and too little.
5. Focus On Building A Good Credit Score
While it may be tempting to use your new credit card for impulse purchases and enticing luxuries you?ve long dreamed of, it?s important to view your card as a means of establishing an excellent credit score.?
As mentioned above, having good credit can help you in a number of ways, not least by making you a more appealing prospect for lenders. Subsequently, it?s important to focus on keeping track of your charges, paying off your balance as soon as you can, and using your card regularly but strategically. After just one year of efficient credit card management, you will already be firmly on track to a good credit score.?
All it takes is a little hard work and discipline and you?ll soon be using your new credit card to your advantage.?