Important Things to Remember When Getting a Credit Card
Credit cards can be both your best friend and your worst enemy. It can be the one that can make your dreams come true or totally ruin it. It’s a double edged sword that you should definitely remember to use in great responsibility.
Before you get your credit card, here are some factors that you have to think carefully!
Fees and Other, Well, Fees
There's no shortage of ways for a credit card issuer to make money off you. Common charges include fees for transactions, such as balance transfers and cash advances, or for asking to increase your credit limit or make a payment by phone. There also are penalty charges for paying your bill late or going over your credit limit (they don't decline your card; they just sock you with a fee for it). Even the best credit card Philippines or in other countries can make this happen.
Look for cards with reasonable fees and payments. On balance transfers, for instance, look for offers with no transaction fees and zero percent interest for at least 12 months. And don't pay extra for rewards programs. There are plenty of card issuers who don't charge extra for them.
How to Compute Your Balance
If you're going to carry a balance, you need to consider how the finance charge is calculated. The most common method is average daily balance, which means that the daily balances are added together and then divided by the number of days in the billing cycle. Stay away from credit cards that compute the balance using two billing cycles; this winds up costing you more money in financing fees. There are plenty of cards that don't use it. Use online calculators on credit cards to make your life way easier.
Your Spending Habits
Even before you choose a card, the first question to be answered is how you intend to use it. Are you the kind of person who will pay off the card every month without fail, or do you anticipate carrying a balance from month to month? Are you going to use it to pay for everything, or just for emergencies? Make sure to choose the credit card that will match your spending habits. Do not forget to minimize your lifestyle in case things go in awry.
Incentives, Incentives
Many card issuers offer reward programs to their customers to induce them to use the card. Assuming you're going to make the purchases anyway -- and the card issuer doesn't charge extra for the rewards program -- it can be a nice benefit. Look for a program that offers flexibility, such as cash or travel, and rewards you'll actually use. Do not get a credit card just because the promos sound great.
Limitations
Credit cards have limit to make sure that you won’t go on an endless shopping binge. Depending on your credit history, it could be anything from a few hundred dollars to tens of thousands of dollars. You don't want a situation in which you're close to maxing out your credit limit. It can hurt your credit score.
