Credit cards are a part of everyone’s financial life at least once. We all want to use credit cards in the right way, but most of us end up misusing it sometimes. It is one of the most powerful plastics that controls your financial life.
Here are a few things you must know about credit cards before you get your first one: –
- There are several types of credit cards to pick from. You can choose from standard cards, prepaid cards, secured cards, student credit cards, balance transfer cards, business cards and many other options. Each card has a different purpose to it, and you should find out about every card before you decide which one fits you the best.
- Sometimes you do not have the option to pick a credit card of your choice unless your credit score is good. If your credit is average or below the line, you will have limited options with credit cards and the limit on them will be less too.
- There is no specific number of credit cards one should have. According to experts, it is best just to have one or two credit cards. The more cards you have, the more you will have to pay interest rates and watch your expenses. It is always better to limit yourself to just two cards.
- Before making the big decision of getting a credit card, you should understand the interest rates on each of them. They can range from a very high rate to the lowest unexpected rate. If you are a beginner and do not manage expenses well, you should either skip a card or get a prepaid credit card. A prepaid card is the one in which you have to put balance to use it. Unless you do not put any balance it in, you cannot use it for any transactions.
- Compare cards, banks, credit card companies, credit unions before getting your first card. All these organizations issue credit cards. Also, the contract is binding when you sign it. Make sure you go through it carefully. Read all the rules and regulations properly before you finalize it. There will be aspects like credit limit, due date, penalties and many other vital things in the contract.
- Card holders have the legal rights to fair treatment. If you feel like there are issues in your bill or you have been paying extra than what your minimal amount was, you can settle it with the bank or company where you issued your card.
Last but not the least, it is essential to use credit cards smartly and wisely. If you are someone who is not good with managing finances and are already piled up in debt, avoid getting a card. Clear up your finances and plan on getting a credit card. If you have no credit limit or want to build your damaged one, you can opt for a student credit card or a secured one. These two will help develop a good credit score for future.