For many, during the months without work or with less income, their credit card was the way to make ends meet. If you don't have one and are thinking of applying for it, what should you know?
Having a credit card is not only useful when shopping, but also has benefits such as discounts, point awards or it may sum up miles to travel with. If you are thinking of applying for one, what things do you need to weigh out before doing so?
If you learn how to use a credit card responsibly, having one can go a long way. It is important, however, to ask yourself some questions before you apply for it and to choose the option that best suits your needs.
• Why do I want a credit card? You should only apply for a credit card when you really need it and when you know it won’t mean getting into debts
• Why is my credit score important? Knowing your credit score is key to determining which credit cards you have the best chances of qualifying for. There are numerous free credit score resources, that are updated on a monthly basis, and are available to find out what your credit score is. Remember to include checking your credit score in the first steps you take.
• Is an annual fee worth it? If you’re looking at a credit card with an annual fee, carefully analyze whether the benefits outweigh the fee. If you don’t plan to use it much, you could end up turning it into an extra monthly expense and not an advantage.
• How do I plan to use the card? If you want your card for everyday use, consider a flat-rate cash-back card, but if you plan on traveling outside the U.S. credit cards with no foreign transaction fees are surely a better option for you.