Factors to Consider Before You Choose a Credit Card

A credit card can come in handy when you need to purchase something, but you don’t have the cash. A lot of companies will offer you great credit card offers on your mail every single day, it can be tempting to sign up to almost all of them. But this would be a big mistake.

Credit Card Help

Before you fill out those credit card forms, you need to be sure that you are financially stable to take on the credit card responsibilities. Credit cards are a good thing if handled correctly.

The following are factors that https://www.prepaidcards123.com/  has come up with that you should consider before you choose a credit card;

1] Why do you need a card?

This is a question that you need to ask yourself before you decide to take a credit card. If you are getting a card to build credit card, then you need to act responsibly with the card and pay off the balance in full each month. This means that you should continue to stick to your budget.

If you are getting a credit card to purchase something that you necessarily don’t need, then you are better off without the credit card. Don’t apply for the card.

2] Look at the interest rate

On a credit offer, the interest rate appears as Annual Percentage Rate [APR]. It can either be a fixed rate or variable rate that is tied to another financial indicator, most commonly the prime rate.

With a fixed-rate card, you are aware of what the interest rate will be for all the months that you’ll be paying the borrowed amount, but with a variable rate, it can fluctuate.

A card with a fixed interest rate can also change based on certain circumstances like paying your card late, or going over your limit.

3] Credit limit

This is the amount of money that the credit card issuer is willing to let you borrow. It could be anything between a few hundred dollars of tens of thousands depending on your credit history.

Credit Limit on a Credit Card

You don’t want a case which you’re close to maxing out your credit limit. This can hurt your credit score, and it can make the credit card issuer cut your credit limits to an amount that’s lower than your current balance.

4] Fees and penalties

The credit card issuer has many ways to make money off you. The common charges include fees for transactions, such as balance transfers, cash advances, or when you make payment by phone. There are also penalty charges that you pay when you pay your bill late or when you go over your credit limit.

When choosing a credit card, look for one with reasonable fees. Choose cards with no transaction fees and zero percent for at least 12 months. Don’t pay an extra fee for rewards; there are plenty of cards issuers who don’t charge extra for the rewards.

5] Limit the number of cards you have

It’s only recommended to have only one or two credit cards. You don’t need more than these. If you have many credit cards, you will feel overwhelmed with debt. The safest way to go is to have one credit card and make sure that you entirely pay it off every month.

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About the Author: Harrison

Harrison is a Professional Blogger and Computer Geeks. Apart from Blogging, he is a fun loving person. His areas of Interest are Computers, Web Designing, Photography and WordPress.

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