When you get a shiny new credit card offer in the mail, it is easy to get excited about your new spending power. While there it is likely there are many things you would like to buy; you have to think about whether or not the credit card offer in question is a good offer for you or not. In this article, we are going to go through 5 questions to ask about any credit card offer.
While there are plenty of credit cards offers that are likely to be swarming you in the mail, if you fail to ask the following questions, you make end up with more than you bargained for. Instead of wishing you would have vetted your new credit card, make sure you go through these questions before signing your name on the dotted line.
1. Why Am I Applying for This Card?
Before you look at the particulars of any card, you want to know why you are applying. Do you want to build your credit? Do you plan on carrying a balance on the card or paying it off every month? Make sure you know why you are applying so you can choose the card that is going to fit your needs and desires.
For instance, if you aren’t a big traveler, you probably don’t need a travel rewards card. If you are going to be paying off your card every month, you probably don’t need to worry about how high the APR on the credit card is.
2. How Does This Card Stack Up to Other Options?
Never just jump on the first credit card offer that comes at you. Whether you are looking at a 0% apr credit card or a credit card that has fuel rewards, you need to see why they would be a better option for you than other cards. It would help if you compared apples to apples and not apples to oranges so look at the travel reward cards side by side as well as low APR. Get a good feel of what is available, so you are able to get the best deal and the card that is going to work best for your needs.
3. How High of a Credit Line Do You Want?
If you are someone that wants to get rewards from spending on your cards, you probably want as high of a limit as you can get. If you want an extremely high limit on your cards, you need to make sure that you have a very good credit score. Unless you have a great credit score, you are unlikely to get a line of credit so make sure you keep your credit score as squeaky clean as possible.
4. What is The APR You’re Really Going to Pay?
While it might be exciting to see offers of 0% APR, if they aren’t going to last very long, you are going to feel the hit pretty quickly. While the minimum time that an introductory APR is now 6 months because of the CARD Act of 2009, 6 months isn’t a long time. You need to look at what the APR is going to be after the introductory rate because that is what you are truly signing up for.
5. What Are the Fraud Protection Policies of the Card
If someone commits fraud on your card, you need to know how you are going to be treated. According to federal laws, you can only be responsible $50 for each charge, but many cards cap it at $0 if you follow certain rules. See if the credit card checks for charges that were not authorized by you or if it is up to you to make sure no one is using your card. Whether they monitor your card or not is a major difference, and you want to make sure they are doing the monitoring for you so you can have the safest card possible.
Finding the Right Card for You
Not every card is going to be right for you and how you plan on spending your money. Before you make any decision, set the criteria for the card that you want and then make your decision. It would help if you only put things on your list that is absolutely necessary, so you don’t narrow your options too narrow and make it difficult to find the right card.
Choosing the right credit card doesn’t have to be difficult. You can even ask your friends and family about the card they use so you can see if any of those options are right for you. It would help if you kept in mind that the people you speak with are likely to have different credit scores than you have so their cards might not be your best option. If you have a credit score that is higher than these people, you may be able to get a better APR than they are or on the other hand, if you have a lower credit score, you might not qualify for the same credit cards they have.
Now you know more about the questions you should ask before you get a credit card and you’ll be able to make an informed decision. Credit cards can be great tools and are often necessary for instance when you are renting a car or a hotel room so having one will ensure you are able to participate fully in the world.