What To Consider Before Opening A Credit Card

by Varun Narula Finance Writer

Opening a Credit Card can be a big financial decision as you are probably going to make it a part of your day-to-day transactions and that is why you need to consider several elements before getting a Credit Card. The fact that you are already thinking about opening a credit card alone tells that you have heard about the benefits of a credit card. Though, Along with the benefits, there are certainly other things you need to take into consideration before getting a credit card.

Let us see what are those things to consider before opening a credit card:

 

1. Your Habits: To observe the things you spend on the most is a good place to start. Since there are many credit cards available in the market, suitable to the needs of different people, you can only make sure to get the right one for you by closely observing your spending habits. When you align your spending patterns with the benefits and features of the credit card, you are on your way towards a delightful credit experience.

 

2. Experience: What is your experience with using Credit Cards? Is it the first time you are getting a credit card or you have had the experience of using many? It is imperative to consider your credit card experience because not every credit card is available for someone just getting started with credit cards. Hence, for starters you might consider the following options:

• Student Credit Cards: Because there is no income qualifying restriction, any student over the age of 18 is entitled to apply for a credit card. It has low-interest rates.
• Secured Credit Cards: For getting a secured credit card, you must deposit some money with the credit card issuer as collateral.
• High-cost Credit Cards: Since by sanctioning the individual with less or no credit history a credit card, the issuer is taking bigger risks, hence they charge high-cost on credit cards.

 

3. Cost of the Card: The cost of the card refers to all the charges levied on the cardholder, One must always consider the cost of the credit card before getting one. It can include your joining fee, annual/renewal fee, interest rates, and various APRs. It is wise to select a card with higher benefits and less overall cost to maximize your ROI.

 

4. Credit Limit: In general terms, a credit card limit is a maximum amount that a person may spend on his/her credit card. You should consider opening a credit card with a credit limit suitable for you, if you apply for credit cards online with a lower credit limit but your spending needs are higher then you will frequently end up reaching your limit which will negatively affect your credit score.

Also Read: How To Check and Increase Credit Card Limit

 

5. Credit Card Category: Because there are distinct spending patterns of different customer segments, there are credit cards available in almost all categories like travel, fuel, entertainment, business, shopping, etc. You need to see which category you spend more in and then accordingly make a decision.

 

6. Terms & Conditions: Yes, reading the fine prints can work wonders for you. You should consider the terms and conditions relating to the reward program, the interest-free period, fees and penalties, the card’s APR range, and many other important details.

 

Considering the above-given elements before moving forward with a particular credit card can ensure you a great experience. After a complete evaluation, you can easily apply for credit cards online directly from the issuer’s official website.

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Created on Mar 28th 2022 02:16. Viewed 1,246 times.

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