A Quick Overlook of Investments – Your Cheatsheet

Factors To Consider Before Taking A Credit Card

A lot of countries have adopted the use of credit cards for shopping rather than carrying money around. A credit card is a very handy tool if used properly but it can also be very damaging if not used in the right way. A credit card allows one to shop with ease, especially if they are buying an expensive product and cannot afford to pay for it in one go. People also go for credit cards because they offer them protection in the event of default or a faulty product from a supplier. These benefits are however to be enjoyed only if one is careful in their choosing of a credit card. Discussed in this article are tips to help you in choosing the right credit card.

The first factor you ought to consider is your spending habits. Ask yourself if you will be able to pay off the credit card each month without default and if you plan to use the credit card for emergencies or for all purchases.

Since interest rate is not an issue if you can pay off your card each month, look for one that does no charge any annual fee. It is important for you to look for a card with the lowest possible interest rate if you do not see yourself being able to pay off your card each month consistently. Look for a card with a low interest rate if you intend it to be used in emergencies only. Choose a card with a reward system in place if you intend for it to be used in day to day spending.
Secondly, you should consider a card’s interest rate. A credit card’s interest rate mainly appears as the annual percentage rate and it can either be fixed or variable. You know the amount a credit card company requires from you at the end of each month if you choose one with a fixed annual percentage rate.

If your card is that of a variable interest rate, you have to wait for a new interest rate each month. Choose the card you are most comfortable with in this case.
Before you choose a credit card, be sure to look at its credit limit. It is important to note that different people’s credit limits vary because of factors such as a person’s credit score. It is important to note that there are penalties for maxing one’s credit limit and so before you choose any card, ensure that you know how much you spend on a monthly basis and stick to it after you acquire your card.

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The Beginners Guide To Cards (Chapter 1)