Credit cards are a convenient way to pay for things and even earn rewards for your purchases. They also come in handy when you are trying to establish a solid payment history or improve your credit score.
Below, you can find out what steps you can take to find out how to choose your first credit card.
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Review Your Spending Habits
Depending on how much you may or may not use your credit card. When looking around for your first credit card, it is important on finding one that matches your spending habits. For example if you travel a lot a or drive a lot using a card that offers points back would be beneficial.
Compare Interest Rates
Every credit card’s annual percentage rate or APR is different. The higher the rate, the more interest you will have to pay and generally, you have to have excellent credit to qualify for the lowest rates.
This can be difficult if you’re still trying to establish your credit history. That means whether or not you have good or bad credit, you will most likely end up with a card with a higher than average APR. That being said you should still look around for a card that best suits your needs.
Take note that some cards come with a fixed APR rate. Many credit card companies also offer 0% interest to new customers for a set period of time. Once that promotional period ends, the APR rate will most likely jump significantly.
Take Note of Fees
Besides charging interest, there are a variety of other fees credit card companies may charge you. These fees include; annual fee, balance transfer fees, late payment fees, over limit fees, foreign transaction fees or cash advance fees.
Generally, the more benefits the card offers or the higher your credit limit, the more you can expect to pay in fees.
How to Apply for a Credit Card
If you are getting your first card, make sure to do extensive research online when you apply. Be sure you take your time, if you can, try to go into the banks branch and sit down with a bank employee and discuss the options available.
Once you’ve established credit history by using a card for several months, you can apply for a card online, over the phone or by mail. Be sure to compare all offers with others online to find what best suits you.
Conclusion
Getting your first credit card is big step into your personal finances. Be sure to really get a clear understanding on what would best suit your financial needs. Taking the time to evaluate what’s out there before you commit ensures that you’ll be happy with your final choice.
Hopefully after reading this you understand how to choose the credit card for you! Be sure to do proper research and learn whats best for your account!
Additionally, If you are interested be sure to check out our list of bank bonuses and CD rates!
