Credit cards: Some people love it, some hate it, others consider it as a necessary evil. Today almost all people living in urban areas own a credit card. The elderly and the kids are handed add-on cards for ease of transaction. Whether it is going out for a movie or eating or booking a holiday or doing online shopping, credit cards are used everywhere. Some people have different credit cards for different purposes. People often have a stack of cards like one best travel credit card for tours related booking, one best shopping credit card to get cash back, one best online shopping credit card, etc. the list is endless. More often than not, people get tempted into owning a credit card, but they are not sure if they have the maturity to handle it. If you too are struggling with the same question, then you must read this blog thoroughly.
Taking the onus of a credit card is not as rosy as it always seems. If not used properly, then you could probably land up in huge debt. What’s worse, you would also spoil your CIBIL and credit score, which could ruin your chances of getting a loan or finance in the future. Credit card is a double-edged sword that needs to be used carefully. If you are not sure whether or not you are ready for a card, then ask the following questions and then get an answer:
Ask yourself, why do you want a credit card?
If you are applying for a credit card so that you could buy yourself a fancy gadget on EMI, or you want convenience while going out. Then wait! You are about to get into steep debt. If you are looking to buy something that you can’t afford, then probably you are not mentally mature to handle a credit card properly. Credit cards charge a sustainable amount of APR, and you should not get in the debt trap.
However, if you are looking to build up your credit score or you have enough funds and maturity that you can pay 100% of your credit card bills on time, then you can apply for one.
Can you handle credit?
Having your first credit card in your hand can distract you easily. So it is advisable that you build up an emergency fund, just in case you overspend. You should also have a steady source of income to make sure that you can pay off your credit card bills on time. Remember if you delay payment, you will not only pay APR but your credit score would also be adversely affected.
Do you know what kind of credit card you need?
Have you done your research before applying for a card? Asses your needs and find out what cared suits your need the best. IF you don’t spend much, then you could choose a zero-annual fee card. If you want to enjoy more rewards and points, then you can choose a card that charges an annual fee (most of the time the annual fee is refunded if you make purchases up to a certain amount).
Once you have checked your need, you can take a card accordingly. E.g., if you travel out a lot, you can take a forex card, or if you shop a lot, then you can take the best shopping credit card that offers maximum cashback and rewards. Before applying for a credit card, do check its reviews on http://pointsbycard.com/
You should also check and compare various features like annual fees, interest rates, credit limits, cash back, penalties, and rewards. Once you have compared all this, you can choose which is the best card for you.
Will your credit card application get approved?
Are you eligible for the credit card that you want to apply for? Some credit card companies are very strict to the eligibility criteria. Check if you are eligible for the card because if the credit card does the check for you and your application is denied your score might get affected due to an inquiry.
We all love credit cards. If you are applying for your first credit card to be prepared and have the patience to handle it carefully, it would be the beginning of handsome credit history.