Did you know that the average American household has over $7,000 in credit card debt? And while you may be looking to sign up for a credit card, there are certain things to keep in mind before doing so.
No one ever really sits down and teaches us about the pros and cons of obtaining a line of credit. And unfortunately, it can be easy to abuse the benefits of a credit card if you’re not careful.
Are you looking into getting your first credit card? Credit cards are a convenient and secure way to make payments. Here are 5 things to know about credit cards before signing your name on the dotted line.
1: Beginner Credit Cards Aren’t the Best Ones
One of the first things to know about credit cards is that beginner credit cards aren’t always the best option. While you may be trying to build or rebuild your credit, a lot of these credit card companies will charge high amounts of interest and fees.
Because of your limited credit history, companies will offer you small lines of credit at high interest with possible expansion in the future.
2: Your First Credit Card Sets the Tone for Your Future
Secondly on our list of things to know about credit cards is that your first line of credit can either build or ruin your financial future.
One of the main reason consumers acquire credit cards is so that they’re able to increase your credit score. But oftentimes, customers can get carried away and end up in more debt than what they initially started with.
If this ends up happening to you or someone you know, there are resources that can help you pay it off and learn more about debt consolidation.
3: Avoid Credit Card Fees
Did you know that you’re able to avoid credit card fees even if you applied for a beginner credit card? Not only do credit card companies offer secured credit cards with annual fees, but if you make your payment on time, you can avoid pay interest fees as well.
4: Use Only 30% of Your Line of Credit
Even though it’s available, you don’t have to use it all!
Getting too close to your line of credit will not only make it harder for you to pay off your credit card, but it can also decrease your credit score dramatically.
5: If Rejected, the Lender Will Tell You Why
If you’ve recently applied for a credit card and were denied, there’s no need to fret. Issuers are great about explaining the reason why and giving you a chance to make the necessary changes in order to increase your chance of approval.
The Things to Know About Credit Cards and More!
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