4 Tips For Choosing The Right Credit Cards For First-Time Credit Card Holders
While some consider credit cards as money traps, there are some who view credit cards valuable tools. Credit cards are so commonly used that they are used to pay for almost anything, ranging from daily expenses, monthly expenditures, to big tickets, or emergencies.
But if you are thinking of applying for your very first credit card, be cautious! There are many credit card scams available on the market, and the tiny fine prints of terms and conditions can be very confusing to you as a new credit card holder.
To make your credit card application easy and pleasant, there are 5 things you need to know before you apply for your very first credit card.
1. Credit Card Limit. As a first-timer, it’s better for you to apply for a credit card through the bank where you have a checking or savings account. If the bank sees that you are a good client, the bank will consider giving you a higher credit limit. Don’t expect to be given a huge credit limit since you don’t have much credit history.
2. Interest Rate. As a new credit card holder, you should expect your APR (Annual Percentage Rate) to be somewhere between 12.99% and 19.99%. The lowest interest rates are only eligible to credit card holders who have had credit scores of 720 and higher.
You need time to build up a good credit score in order to secure better credit card deals in future.
3. Fees and Penalties. Beware of credit cards that target first-time credit card holders! These credit card offers to first-timers tend to be given low limits and high interest rates. There are also annual or even monthly membership fees charged.
If there are account setup fees and periodic finance charges added, then you may need to consider if they are still considered good deals. Try to compare as many cards as possible to choose one credit card that doesn’t charge you membership fees.
Also, pay attention to the penalty fees charged. It’s important because if you make a late payment, you’ll be charged the penalty fee.
It’s advisable to always make your payments timely, or else you could be stuck with a 30% interest rate on your purchases.
4. Rewards and Incentives. Look for credit cards that reward you points or rebates for your purchases. Some reward cards have higher interest rates than regular credit cards, so be sure to pay your balance in full each month so that your cash back incentives don’t get eaten up by interest rates.
Choosing your first credit card is not as daunting as you think. Make sure you are clear with the credit limits, interest rate charges, fees, penalties and rewards offered. Remember — always read the tiny fine print of terms and conditions in any credit cardholder agreement before you sign on the dotted line.
Related posts brought to you by Yet Another Related Posts Plugin.
