Things to consider before and after getting your new credit card

Whether you are a student, entrepreneur, and homemaker or have a family to support or business to run, there are at least a dozen credit card options available for you. The different rewards schemes and benefits for credit cards are curated based on the concept that different consumers have different needs. There is not a single credit card that can be the best for everyone; neither can a single card meet all your needs. This is where the need to have multiple credit cards comes in.

Before you set out to apply for that credit card, there are a few things that you should take into consideration:

• Look at your credit score
  Each credit card has a purpose to solve and is designed keeping in mind a specific type of consumer. The question of whether you are that consumer or not can be answered by your credit score. Most benefits of these cards are favorable towards people who have a good credit score. For example, a FICO score of 670 or above is considered to be a good credit score. You can look at your options by checking your score and then comparing credit cards that offer rewards for that range.
• Research, research, and research
  Never jump up at the first opportunity you are presented with. It is important to research enough and know about the hidden costs and conditions before you apply for a particular credit card. Make sure you know enough about the offered interest rates, rewards rates, apart from the general conditions and perks it offers.
• Application process
  Choosing between multiple cards can be quite confusing. Having said that, the application process of a credit card is not a tedious one. If you don’t want to apply for one online, you can even go to the nearest branch and submit your application there. The process is speedy, and on approval, you shall even get to know about the expected date of receiving your card.

Different people have different needs. While the banks are trying to understand what you need and offer you the best deals, it is equally important that you take into consideration some things before you apply for a particular credit card. Before reaching out for that credit card application form, think about your credit score, preferences, and spending habits.

The acceptance of your credit card application form depends on your credit score. The better your score, the better are the chances of a bank accepting your application. However, if your credit score is not good enough, getting a card can prove to be difficult. In such cases, it is better to increase your FICO score before applying for a credit card. The process of bettering your credit score can be time-consuming, but it is essential that you build your credit to an acceptable score. You can easily access your FICO score through various sources for free.

Coming to your preferences, you need to figure out how you will be repaying your credit card spendings. This is where you can also think about the interest rates that your card is offering. If you plan on making your payments in full on a monthly basis, the interest rate should not be a cause for concern. But, if you intend to pay off your credit card debt in installments, you might want to give the interest rates of the cards you are considering a serious thought. In this case, the cards that offer lower interest rates might be much more beneficial for you than you initially thought.

Lastly, take a look at your spending habits. Your spending habits are directly going to have an effect on the credit card you plan to choose. If you are considering getting one of the cards that also offer rewards on spending categories, go for one that has good offers and reward points for the kind of expenses you make. This might make your spending habits profitable for you, and you may even end up earning a lot more benefits than you spent.

Now that you have finished making note of things you should be considering, let’s take a look at the different types of cards available.

Depending on your reason for applying for a new one, you can pick one of the following types of cards:

• Credit cards with cash-back offers
• Credit cards with travel benefits
• Credit cards that allow balance transfers
• Credit cards with zero APR
• Credit cards for students
• Credit cards for businesses

Finally, consider the perks of the various types of cards that could benefit you. If you do not immediately need a new card, you might be able to monitor your spendings and find out which card is suitable for your needs. This can give you an added advantage.

Now that you have successfully passed the initial stage of deciding what you want and managed to acquire a new credit card, here are some pointers that can help you make the most of out it:

• Possessing a credit card doesn’t mean that you go overboard with your spending. Though a useful asset in times of need, credit cards can put you in serious debt if you don’t use them wisely. Hence, make sure that you don’t go splurging on non-essential things every now and then. This will burn a huge bill in your pocket and leave you gaping at your bill at the end of the month.
• Try paying off your bills in that month itself. This will ensure that you don’t have to pay extra in the following months. Plus, it also means that you won’t be overburdened with the added bills to be paid off or the interest amounts that keep piling up.
• Contact your bank in order to set up an automatic payment transfer towards your credit card bills. You can also set it up yourself. This will save you from accidentally forgetting to make payments and carry forwarding it to the next month.