What to consider before getting a new credit card
Interest: You have to keep an eye on the interest rate and keep in mind that often this is negotiable after you are approved. Simply, call the credit card provider and let them know that you are not happy about the interest rate and may turn down their offer. Often, they will change it for you on the spot.
Rewards: Make sure you understand the rewards program. Often the credit card companies lead you to believe something based on their commercials. However, when you really dig into it you quickly realize that the program does not work exactly how you though it would. Airline miles are a good example as you may have to spend $25,000 per year to get a single one way flight.
Fees: Most of the rewards cards charge monthly or annual fees to be eligible to receive the reward points. Be sure you know what the fees are as often the fees can exceed the benefit of receiving the rewards in the first place. You really have to watch out for the fees if you have bad credit. The fees can exceed your credit limit in some cases making the card worthless.
Credit Card Limit: In general, the higher limits you have the more likely some other bank will give you a high limit too. For this reason, you do not want a million low limit credit cards you would much rather have just a few with a high limit. Simply, turn down any credit card offer that does not come with a high limit.
Fine Print: Be sure you understand everything there is to know about the credit card. Some will jack up your rates even if you are late a single day. Also, they usually have the right to lower your credit limit or turn off the card until the balance is paid in full. This could be devastating if you only have one or two cards.
Other Products: Some credit card companies offer you significant discounts on their other products and services if you have a credit card. You may be eligible for discounted insurance, other loan products, and higher interest rates on your deposits. These additional services should be considered.
Get Approved: Only apply for credit cards that you know with absolute certainty you are going to get. This includes pre-approved offers, but does not include pre-qualified. If you get an offer that says you have been pre-qualified, throw it away immediately as it is completely worthless.
Check out our site for more information about secured credit cards to rebuild credit and best credit cards for young adults.
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