Almost everyone has credit cards nowadays and they do come in handy for many things. If you have an emergency and do not have the cash right away, you can use your credit card. It is also handy for making reservations and paying for your vacations. If you have never had a credit card, there are some things you must consider.
One thing that you should consider is how much a credit card can cost. There are many fees attached to credit cards and you need to be aware of them. You also need to remember that the billigste, or cheapest credit cards are not always the best ones. Some of the best cards may cost you a little more, but you will get more benefits from them.
This article will share with you some tips and suggestions for the person who is getting their first credit card. There are many things that you need to know before you begin using a credit card for the first time. If you know about them before, you will have much better luck with them.
1. Best Cards Are Not for Beginners
For a beginner you will not be able to qualify for the best credit cards. You must build up a credit history before you are able to do that. You also need to have a credit score of at least 690 to qualify for those cards and you will not be able to have that until you have built up that history. There are many cards designed for people trying to build up their credit, and most are easy to qualify for.
2. Security Deposit
If you do not qualify for a beginner’s credit card, you might want to have a secured credit card. With this type of credit card, you will give them a deposit of something between two hundred dollars to five hundred dollars. Once you do that, that will be your credit limit on your card. If you use it correctly and pay your bills on time, you could graduate to an unsecured card and you could get your initial deposit back. You can learn more about secured credit cards and how they work here. They can be a great way to start your credit experience.
3. Your First Card Can Build Your Credit or Not
You want your first credit card because you want to build your credit so be careful how you use it. If you do not pay your bills on time or you max out your credit card each month, it will look bad on your credit report, which will result in a lower credit score. If you do the opposite and pay your bills on time and only use up to thirty percent of your credit limit, your credit score will go up and your credit report will show your effort.
4. Check Out Rates and Fees Before You Apply
It is required by federal regulations that credit card companies must divulge all the rates and fees associated with the card you are applying for. Before you sign up to get a credit card make sure that you read all about the rates and fees and make sure that you agree with them. They can be quite expensive if you are not used to seeing them.
5. Credit Card Fees Are Avoidable
Even with you being new to the credit card world, you can avoid the fees associated with them. There are many starter cards that have zero annual fees and some even have no interest for a short time. You will not have to worry about late fees if you on time each month, and you will not have to worry about foreign transactions if you never leave the country. Over limit fees are not much of an issue anymore, and they will not be if you stay within your limit. Learn more about credit card fees and how they affect you by doing a little research. If you are careful, you will not have to worry about credit fees.
6. You Can Avoid Interest Fees
If you pay your bill in full every month, and pay it on time, you will not accrue any interest because of the way the credit card system works. Pay in full and on time every month and you will never have to pay any interest fees. This is a good way to avoid fees and build your credit history, as well.
7. Pay More Than the Minimum
You are allowed to pay more than the minimum due each month, and you should do it. Like was stated above, if you pay your bill in full each month you can avoid some of the extra fees. The minimum fees are just the interest and other fees with a little going to your balance. You will not get anywhere, and you will end up paying more in the long run.
8. Paying Late is Costly
It can get expensive pretty quickly if you are late in paying your credit card bill. You could accrue late fees that can be in excess of twenty dollars, and you could get hit with interest penalties, as well. You want to be sure that you pay your bills on time so that you will not get a negative report on your credit report, and you will keep a higher credit score.
9. Do Not Get Close to Your Credit Limit
If you get to close to your credit limit it will bring down your credit score quickly. As stated above, you only want to use about thirty percent of your available limit. If you do that your credit score will stay in a healthy limit. The lower your credit utilization score is the better your credit score will be. Learn more about the credit utilization scores here: https://www.experian.com/blogs/ask-experian/credit-education/score-basics/credit-utilization-rate/. This score can help your credit score in the long run.
10. Credit Card Fraud
Dealing with credit card fraud is not as difficult as it may seem. If you have lost your card or someone has stolen it you can call and cancel it quickly. If someone has used it in the interim, you will not be responsible for the costs. Getting a new card is also simple, just call your card company and they will shut off your old card and send you a new card. Again, you will not be responsible for any costs associated with your card being stolen.
11. Credit Card Rejection
If you are rejected by a credit card company, you will be told why you were rejected. It is required by federal law that you be informed of any reasons that you were rejected. Do not worry too much about it, if there is a problem you will be able to fix it. It might just be that you need more time to qualify for the card. It also might be that you have some issue that you need to fix on your credit report.