Points to consider before applying for a credit card

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Choosing a credit card could be a lot like being the transfer executive of a professional soccer team. You want to buy all but you can barely afford a couple. The dilemma is so excruciatingly overwhelming that you often end up making the wrong choice and spend the rest of your mortal life feeding the beast you bought. There’s no running away from the lure of buying one either. If you haven’t got one yet, your inbox must probably be full of these enticing invites to purchase a Credit card from a range of banks and, no matter how hard you resist the temptation, it’s inevitable you’ll end up with one. And it’s hard to argue as to why we shouldn’t have one. Who doesn’t love credit in this cruel world? That’s essentially what a Credit card does for you. But again, choosing one shouldn’t be as stressful as your day job either. Here’s a few points to consider when buying this curious piece of plastic :

1. Why now? :

Self analysis is the best analysis. Knowing your purpose when choosing a Credit card if just as important as it is in life. Even before you consider buying one, you need to understand whether you really need one. Buying a Credit card just because your friend seems perfectly pleased with the one he/she has, could be misleading. Credit cards come for varied purposes and each having different characteristics. Choosing the right card could also earn you valuable rewards and make you feel good about owning it but it ain’t going to be a smooth sailing with it forever. Irresponsibility with it could leave you homeless,like literally. Credit cards range from Business, Travel, Personal, to name a few. So don’t get ahead with yourself and understand your purpose.

2.  Be aware! Interest rates ahead:

Don’t be fooled by the zero interest fee applicable on the card you’re buying. In the blink of an eye those rates could hit the higher 20% and leave you scratching your head as to how did it really happen. Zero interest rates are applicable only for an introductory period, ideally a month or two at max. So, when you feel burdened by the weight of your wallet and decide to buy a Credit card, get real. Understand exactly how much would you be paying each month and then suit yourself.

3. Bills, bills and bills:

Who doesn’t enjoy making money? Although it’s hard to argue if anyone could do it better than Credit card companies. They love when you go to a store being broke and buy things you can’t afford and swipe your card as if you own the damn world. This gives them unparalleled opportunities to charge you leaving you wondering where did it all go wrong. Inevitably, you might wanna try and use your card sometime, even if you don’t want to. Soon enough, you’d be paying more than half of your salary on Credit card bills, and that hurts. So, you could either opt to go on paying these higher interest rate bills every month or you could retort to consolidate these bills entirely through a short term personal loan from a P2P lending platform like LenDenClub. This seems like a viable option as the interest rates are comparatively less and is a cheaper way forward.

4. Rewards:

Don’t we all love getting rewarded? Your credit card too, could actually turn out to be rewarding, although not often. Your purchases earn you extra money which you could easily redeem to buy groceries or games or anything really. Cash back cards are the best as they earn you the most rewards. Also, flexibility with these rewards can be a bonus but be careful. These rewards must suit your needs and spending lifestyle otherwise, it’s a waste. So, choose a card which offers you rewards on a variety of purposes and the ones which you’d be able to redeem.

5.  Credit limit:

This term literally tells you how much money you can spend using a specific Credit card. This limit is something noteworthy and should be kept in mind when you are considering to delay paying your Credit card bill. Late fees payment could seriously hamper your credit limit and leave you hoping the Credit card company simply make an exception and forgive you for it. This limit gives the companies an idea about about how good you are with money and paying dues. A higher credit limit signifies how responsible you are as person. Choosing a Credit card with a flexible Credit limit is advisable.

So, choose a card which fits with your spending habits without having to change your lifestyle.

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