Applying for Credit Cards: What to Look For
Credit cards are designed to help you build your credit and create a positive credit report, but they are also designed for the company to make money. If you carefully select which card to apply for, you can avoid having to pay too much money in the long run.
When applying for credit cards, there are a few things you should look for to help you make the best financial decision you can.
No one wants to wait several weeks to figure out if they can be approved fro a certain credit card. Most people need to know as quickly as possible, so they can begin using the card, or for if they have a special purchase in mind.
Most credit card companies can approve your application pretty quickly after you apply for their card membership since the technology for checking one’s credit history and current outstanding debts has improved dramatically.
Fast approval times are also a reason to be careful though too. Don’t jump into a credit card contract just becasue you need the money. Make sure you read the fine print on the APR, whether they have to right to increase it at whim, and if there are any other sneaky fees that are not immediately evident when applying.
No Annual Fee
Some credit cards will charge you an annual fee for using the card. However, there are plenty of them that do not. To avoid having to pay this fee, you should specifically look for cards that do not charge you anything for it. Credit card companies already charge enough for interest, so you shouldn’t have to pay any fees just for using the card.
Annual Percentage Rates vary among credit card companies, some being extremely high and others being extremely low. It is best to look for a card that has the lowest APR possible. High APRs can make it difficult to pay back the money you have charged.
If you have over a thousand dollar credit limit and the amount you owe gets really high, you will be charged interest at whatever APR your credit card is set at. The higher it is, the more you will end up owing. Paying off your credit card balance every month can ensure you never pay interest.
However, that is not always practical, and the reason most people have credit cards is for purposes of filling in when they are cash strapped, in addition to simple convenience.
If you are not going to pay off your credit card balance every month, then getting a low APR is even more important for you. Why? Because credit cards work on the principle of revolving debt, and this means that you are paying interest on you debt every month, regardless of how much you’ve paid it down.
So, if you let a $500 balance carry over to the next month, you will be charged the same percentage on that balance again and again, instead of just one time, like what happens with a loan.
Cash Back Benefits
When applying for credit cards, you will get the most out of the ones that give you cash back benefits. When you make purchases with your credit card, the company gives you a percentage of that money back. This money starts to add up and you eventually accumulate a good amount of extra money.
Apply for credit cards that have this type of bonus available. A really great card will have a 5% cash back bonus, although even 1% is worth it. Some credit cards will give you an even higher percentage for charging college textbooks and supplies, if you are a college student.
Other Special Bonuses
There are credit cards out there with tons of different bonuses; you just have to find the right ones to apply for. Sometimes when you shop at certain stores, using a credit card from a specific company will get you a discount. Look for cards that have these kinds of bonuses.
This will help you save even more money. There are also credit cards that give you special discounts on concert tickets, movie tickets, and other kinds of entertainment. Some even reward you with the chance to purchase tickets before they go on sale!
Applying for credit cards is something that everyone usually ends up doing at some point in their life. Many people get themselves into financial trouble partly because they are not choosing the right kind of credit card.
Not every card is right for everyone, so you should choose one that fits your particular needs. Generally, you should look for cards that have no annual fee, low APRs, cash back benefits, and even entertainment benefits. This will help you get the most out of your card.