Credit cards can be wonderful to have if you use them correctly. You don't want to run up a large credit card bill and then not be able to pay it off, because this can negatively impact your credit score, and we all know how important maintaining a good credit score can be in this day and age.
Your credit score is your level of trustworthiness when it comes to establishing lines of credit with companies. Card issuers can look at your credit score and determine if you are at risk of borrowing credit and then not paying it back. Having a good credit score shows that you make your payments faithfully and on time. A great credit score can even help you get into a new car at a cheaper monthly price or even get your foot in the door of a new home or apartment!
These are some of the reasons having a good credit score is essential these days. Of course, to build a good credit score, you're going to need to get your hands on a credit card and utilize it, buy things with it, and then make your monthly credit card payment on time so it gets reported to the big credit bureaus, which will reflect on your credit score.
There are a lot of credit cards out there, though, with different perks and from different companies. What are some of the things you should consider when applying for a new credit card?
Consider These Things When Looking at Credit Options
If you don't have any credit history or a newcomer to the United States, then you may be new to the concept of credit in general. This guide can help you make informed decisions when looking at credit card options for yourself, and many online publications such as Nova Credit have even assembled lists of some of the best credit cards for you to check out, along with their perks.
When thinking about opening up a new line of credit, you will want to consider several factors, and don't take any of them lightly, as they can impact how you plan to use your card, where, and when.
Think about these things and compare them against other credit card options before settling on a specific card. Don't jump on the first card option you notice without doing some comparisons first, because you may miss a great option that could save you money in the long run.
- Fees on the card: Most credit cards will have some form of fees associated with them. Many credit cards require you to pay a certain fee yearly, known as the annual fee for your account, which will keep your account open. Some fees are based on how you use your card, too, like foreign transactions or cash advances.
- Perks and rewards of your card: Many card issuing companies will throw some perks and rewards into your card as an incentive for you to keep doing business with them. Sometimes, these rewards really come in handy and make you want to use your card often. Some perks might be something like cash back rewards after you spend a certain amount of money with your credit card. Other rewards might be special discounts at airlines or hotels, or discounts in participating stores or gas stations. The perks and benefits vary with every card issuing company, so read around and find one that would best suit your spending habits before applying.
- Grace period on your bill: Many card issuing companies will have a grace period allowing you to make your payment before your account starts building up interest. Pay attention to your due dates and make sure you make your payments on time, and you'll never have to worry about paying interest fees on your purchases, and you'll also get to keep your grace period.
Many of these factors will differ based on the type of card you are looking at applying for, as well as the company issuing the card. Don't settle for the first option, take note of anything that interests you about certain cards, and when you find one that best suits your spending habits, then you'll know you found the right card to apply for.
Once you've found the credit card that's right for you, you can begin using it, making your payments on time, and keep your credit score in great standing.