If you’re weighing up getting a credit card there are a few things you might like to think over before settling on one. With so many lenders and a huge range of products available, it’s worth shopping around to see what is on offer. But before you make an application you might also like to ask whether you should get one, as doing so for the wrong reasons can cause problems.
With that in mind, it might be worth thinking about some of the following:
Do You Have a Good Credit History?
Whenever you make a credit card application the lender will firstly look at your credit rating to assess whether you’re a worthwhile candidate. This is determined by looking at your history of paying debts, taking in to account bills and mobile phone contracts when appropriate. A good score increases (but never guarantees) your chances of being accepted for a product. If your credit rating is low, as it might well be if you’ve never previously had a credit card, then you might have to accept a higher interest rate. This is a good way to build your credit rating, providing you keep up to date with payments.
Avoid making multiple applications in the hope that one will be accepted. While this might give access to additional credit in the short term, they will be listed on your file and may harm your chances of being approved in future.
Are You Organized?
If you struggle to be organized then you might need to change your ways before using your plastic. Missing monthly payments and exceeding your credit limit are just two of the things that can see you hit with charges. To avoid this, it’s always wise to familiarize yourself with the terms and conditions and set up a direct debit to ensure at least the minimum payment is covered each month.
Can You Afford to Cover What You Spend?
For some people being given access to credit can increase the temptation to spend more than they should. It’s always worth remembering the outstanding balance each month will be charged at the agreed rate of interest, which for those only making smaller payments means the bills can soon mount up. A recent study showed that a growing number of older people in Briton are suffering from debt problems, so always have one eye on the future when you use your card.