It is only when you have made it in life that financial institutions look to offer you a credit card. It is perhaps some time ago that you have been offered the first credit card and it is a huge milestone. It is also a big adjustment in life because with the credit limit as back up, one surely undergoes plenty of changes in the lifestyle. It is prior to actually getting hold of the card; there is an application process to complete. You could be perhaps pondering over on should I apply for a credit card and we have something to say. We would like to discuss seven key aspects of a credit card, which you must have knowledge. Let us discuss on these lines.
As a beginner you will need to explore beyond the best cards:
You could be a newcomer to credit and as we discuss facts about credit cards, this is a golden rule, which you must remember. Unless you have a credit history to fall back upon, one will just not qualify for the best cards. Therefore the first suggestion from our end will be to make a small start.
The security deposit concept can help:
It has been felt that the secured credit card is perhaps the best option for starters who are actually facing trouble in acquiring the cards. It is a concept, where you will have to pay some cash deposit and then avail a card. It is for people with damaged credit or no credit at all. Your next question could be on why we need credit card at all? We would like to say that it is just a start and surely as you associate more to these cards, one can apply for upgrades.
Be careful with your first card:
It is perhaps to boost the credit that one may have applied for the card. It is precisely at this stage we would insist on the need to be careful or else the opposite may happen. Every month the credit card issuer will send a report on your credit card activities to the credit bureau. It is based on that report your credit ratings will be prepared and hence you will need to be careful.
When should I get a credit card?
We have taken up this question primarily because it is essential to do a comparison prior to the application with a certainly credit card issuer. Is there any annual fee? What is the annual percentage rate and do they charge late fees? These are some basic aspects, which you need to look at prior to placing an application with a credit card issuer.
How do you make the payment?
Every time you use the card it is after the billing cycle, the issuer will send the bill to your address. One must check out prior to the application on the payment terms. Is there a balance option for the card? This concept allows you to make a minimum payment and carry forward the rest for the next billing cycle. You will need to clarify this aspect.
Avoid the late payment:
You must make it a habit to pay within the due date. You certainly have to pay the late fee and higher internet rate for late payments. It is alongside there will be significant damage to your credit score.
It is a legal contract once you sign:
One needs to read the details carefully because once you sign; it becomes a complete legal document. Hence, you need to carefully go through the document prior to signing the dotted line.
This is an extensive insight on the concept of credit cards and just in case anyone asks what do you already know about credit cards quizlet, this can be a ready answer. These are cards which if you use carefully can come in handy in times of distress and hence one needs to be careful.