Choosing a credit card for the first time can be a confusing and bewildering process. What should you look for? How do you make the best credit card choice for you? There are so many credit cards – Visa, MasterCard, American Express, Discover – and the wrong choice can cost you a lot of money. Don’t panic! The first time you choose a credit card doesn’t have to be a stressful experience. Just keep a few things in mind, and credit cards can be much easier to deal with than you think. Here are a few helpful tips to get you started.
- Decide what you want to use your credit card for. Will it be for emergencies only, or do you intend to build up your credit rating by using it often?
- Compare credit cards and note whether or not they charge an annual fee, what the late charges are should you make a payment after the due date, and most of all, check the interest rates. You want to choose a credit card that offers the lowest interest rate, but not if it costs you more in annual fees. A credit card comparison here could really save you a lot of money in the long run, and a lot will depend on how you intend to use your card. A 0% credit card might sound good, but there could be hidden charges in the fine print that will cost you down the road.
- Does your credit card offer a reward program of some kind? Many credit cards offer ways you can earn points or dollars redeemable for free gas, air miles, discounts on other travel expenses such as hotel rooms or shopping. While air miles might not be attractive to you, maybe gasoline or shopping is.
- Check the policy on 0% balance transfer credit cards. This could be a great benefit later down the road if you should decide to switch credit cards or transfer the balance from another one.
- What is the credit limit? If you are just starting out in the credit card game, it’s best to start small and build your way up gradually. It can be way too much temptation to have a huge credit limit and easy to forget this is money you haven’t actually earned yet. Pay your balance off each month to save yourself large finance charges on the remaining balance.
There is definitely a lot to think about when choosing your first credit card, but start small, do your research and be responsible. With just a little effort, you can have a credit card that’s perfect for you which will save you not only money, but a lot of headaches in the long run.
Guest Post from Mike Brains of FinancialFacts.Org
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