Credit cards are an important financial tool for many people. Using them correctly can help you improve your credit score and achieve more with your money. However, the fact that nearly half of all Americans have credit card debt should be a cautionary tale: you need to know what you’re doing.
In this guide, we’re going to cut through the jargon and show you what applying for a credit card involves and what responsible card usage looks like.
Are you ready to learn more? Then let’s get started!
Finding the Right Credit Card for You
As a first-time credit card user, it can be pretty tempting to apply for the very first credit card that catches your eye. However, doing some research could give you a much better credit card.
The first thing that you should look at is the credit card’s interest rate. A higher interest rate means that your debt will increase more over time, resulting in serious financial issues. Look for a card with an interest rate below 14-15 percent APR.
You may also wish to consider the perks that come with each credit card. Some may offer perks in hotels or on flight bookings, for instance.
You should also consider other factors such as how much the credit card will charge for overseas usage, etc.
Applying for a Credit Card
Now we come to the credit card application itself. When you apply for a credit card, the company will check your credit score and see whether you pay your debts on time and so on.
If you have a poor credit score, you’re unlikely to be able to get a credit card.
During the application, you’ll need to provide the card company with some information about you. This usually includes your full name, address history, nationality, employment status, and salary.
You should hear back about your application within a minute or two. You will then need to wait for around a week to receive your credit card in the mail.
How to Use a Credit Card Responsibly
Responsible credit card use is key to avoiding debt and long-term financial problems. So, how should you use your credit card?
To start with, you shouldn’t treat your credit card as free money. You should try to clear it every month, as this will improve your credit score.
If you need to pay your debt off over a few months, you should always try to pay more than the minimum amount. Paying off your debt with the minimum amount will take far longer and build up more interest.
Finally, avoid maxing out your credit card if at all possible. Maxing out your card can seriously damage your credit score and make it harder to get other loans in the future.
Applying for a Credit Card Is Easy
We hope that you’ve enjoyed this look at what applying for a credit card involves, as well as our handy credit card usage tips. If you use our advice and don’t overextend yourself financially, credit cards can be a great tool in your financial arsenal!
For more helpful content like this, be sure to check out the other articles on our blog.