The excitement that comes with applying for a credit card can be a bit misleading. Yes, it’s okay to be excited but there are a couple of things to take note of when applying for a credit card. The credit card and expenses associated with it must be managed properly as it will tell you about your finances, your credit score, your job and even your living standards.
Deciding which to pick as a first timer can be a bit confusing as many beginners go for the secured credit card. However, any credit card can be effective when managed properly. So let’s quickly take a look at the things to be considered when getting your first credit card.
- Your Income
A lot of first timers don’t consider this when applying for a credit card and it’s wrong. Your income will determine the kind of credit card to go for. Some credit cards may catch your fancy especially with the rewards that come with them. The rewards may be cool but going beyond what you can afford isn’t.
So when given options, assess them wisely and pick the credit card that suits your budget and income. The benefits will far outweigh the rewards on other credit cards that do not suit your income level.
- Consider A Secured Credit Card
Like I said earlier, a lot of first-timers apply for a secured credit card because of the little pebbles of peace that come with it. Unlike the other credit cards, here you pay an amount like a down payment from the beginning and this will keep your spending in check. Whenever you begin to spend beyond your limit, or you are unable to pay your bill, the amount paid initially will be deducted to cover for it.
This will save you from whatever interest your bill would have accrued.
- Be Mindful Of Your Credit Score
I say this because your credit card activities will on be reflected on your credit score. It is on the basis of this that I recommend going for a credit card that suits your budget. Also, spending within your limits is also very important to save you from running into debts.
Spending wisely with your credit card and paying your bills on time will help keep your credit score in check. Late payments will accrue interests, affect your credit score and give a bad image when sourcing for a job or the likes.
- Ensure To Find Out The Rates And Fees Before Applying
Every company puts out their rates and fees to potential applicants so be sure to know them before moving on with your application. This will keep you guided and aware of whatever maintenance charges you will have to pay mostly annually and sometimes monthly. If it seems too high, you can move to other companies and then settle for the one you are comfortable with.
- Manage Your Rates and Fees Effectively
Here you will find the secured credit card a great option too. While some credit cards come with annual fees, secured credit cards and some other cards don’t. Going for cards without these fees will excuse you from ever having to pay them. Also, the charges that come as a result of delayed payment of bills can be avoided if you pay on time.
To have a smooth credit card experience, spend within limits and pay your bills on time.
- Timely Payment Of Bills
A good way to get soaked in debts is to delay the payment of your bills especially when you aren’t using a secured credit card. The unpaid balances from months will keep adding up and the interests will be growing as well. Not just that, it will take its toll on your credit score and make the acquisition of certain things an unpleasant experience.
Again, the interest charges are completely avoidable. Buy what you can afford to pay for and pay for them on time. Don’t allow yourself to fall into the habit of impulse buying. Clear your bills and maintain a good credit score.
- Don’t Fall For The Minimum Pay Trap
When making payments, ensure to pay above the minimum requirements. The minimum payment is just a mark to what can be paid. Every uncleared balance will be considered debt and carried into the next month, accompanied by an interest rate. Ensure to pay the amount you spend and not just the minimum given to you.
- Avoid The Penalties
So technically the penalty is there to guide credit card users to not default. Once you default a payment, it’s not avoidable and can only be cleared upon payment. The rates may increase over time so defaulting payments should be avoided at all cost to prevent bankruptcy.
Usually, payments are not considered late unless they aren’t cleared over a space of one month and over. It’s quite a lot of time to avoid facing the penalty so be calculative with your spending.
- The Big Advantage Over Debit Card
With all the do’s and don’t regarding the use of a credit card, it’s easy to not come across the benefit it has over the debit card. Most credit card users never have to worry about being robbed of money. That is, even if you are in a situation where your card details have fallen in the wrong hands. All you have to do is make a report and sit back.
The credit card user is protected here as the company will have to bear the loss in such an event so you are kind of covered making this a really safe option.
However, you still want to be careful with your card details to avoid getting into such a situation in the first place.
- Managing The Rejection That May Follow Your Application
Some first timers face rejection when they apply for a credit card maybe due to their credit score or whatever reason. A good way to navigate this is to find someone preferably a member of your family who would not mind being a co-owner. Having someone as a co-owner gives the company a bit of confidence to accept your application and issue a credit card.
So there! All I think you should consider when getting your first credit card. The rule remains, spending wisely and staying within your limits. Good luck!