Signing up for the very first credit card is a huge achievement amongst Americans. Not only will a credit card opens a passage into independence, but also tons of new benefits. While you may be tempted by the credit limit of the card, choosing the right card is one of the most important decisions in your life.
The choice of your credit cards will have a massive impact on the future of your financial state. If you are interested in a savings credit card, you must get in touch with your financial institution for their services. They will also make you aware of the benefits of these credit cards.
However, don’t be intimidated. If you use them correctly and wisely, credit cards are the best way to nurture and boost your credit score. A credit score might look like nothing but a number, but that particular number will help you a lot when purchasing a car or home.
As there are tons of credit card options available, you need to select the best one. Modern users are more into digital transactions. The necessity of immediate cash is felt by individuals all across. In this article, we will discuss the top 4 steps that will help you to choose your first credit card.
Examine Your Overall Finances
No matter what you see or what you hear, don’t ever assume that a credit card is “free money”. Before you start applying for a credit card or submitting a credit application, you need to be honest with your overall financial state. Many people neglect to look at their financial well-being. So, they end up being rejected.
Various vendors and retailers accept savings credit cards. Hence, you do not have to be fearful of any hassle in the buying-selling process. Although it is a legitimate concern, there is a long list of vendors who accept credit cards for the transaction. Remember that you need to cover the charge of the credit card monthly.
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Hence, you need to be truthful about your income. Credit card companies usually don’t verify your income through tax returns. However, you’ll be asked about your income, and providing false information is illegal.
Consider Your Options
As you’re a fresh credit card applicant, you won’t have lots of choices, but some options will allow you to build your credit score. One of the simplest methods is to ask your parents to add your name as an authorized user to their credit card account.
As you gather the credit scores, your parents can teach you the value of credit scores and how to properly use credit cards. By making provisions for timely payment of bills, you may establish your creditworthiness. However, this is beneficial until you become 19.
You can also start your credit journey with a secured card. It determines the limit of your credit based on the deposits you’ve made.
Evaluate the Annual Fees on Credit Cards
The annual fee of a credit card varies from company to company. An annual fee is generally a membership cost that can range anywhere between $0 and $500. Remember that the higher the annual fee you pay the higher benefits you receive.
For instance, if you take your first national credit card, you’ll be able to utilize many benefits such as cashback, free travel insurance, and no foreign transaction fees. If you happen to be a student, you might not need to pay any annual fees.
Availability of funds:
A significant point that has helped credit cards gain momentum is fund availability. Although there is a predetermined limit, you can borrow money instantly and take care of your purchases. In addition, it eliminates the requirement of a new application for new funding. Hence, credit cards help you to save time and resources.
Consider the Rewards
One of the major benefits of using credit cards to complete a purchase is the rewards. Unlike debit cards, when you purchase something with your credit card, you’ll undoubtedly receive some attractive rewards.
As per CNBC, this type of card is known as a reward card. Hence, picking up the right credit card will maximize your chance of bagging greater rewards. If you focus on getting rewards, it’s suggested to go for cash-back credit cards.
These are the 4 steps you need to remember while choosing your first credit card. Remember that credit card is very important to maintain a healthy lifestyle. In addition to this, credit cards provide you with different options and help you to understand costs.
If you have a poor credit history, you have to make constant possible efforts to improve it. Get in touch with a trusted issuer so that you do not have to deal with unnecessary hassles later on. After you get your credit card, don’t forget to maintain the credit score.