Stop Missing Out On Rewards And Manage Your Credit Score With These Card Tips

I am considering getting a credit card. Is it a good idea?

Credit cards can be a very useful addition to your wallet. These days credit cards are a straightforward substitute for cash, and are useful if you plan to purchase anything online. When you are traveling using a credit card for 90% of your needs means you don’t have to carry cash with you, and since credit card expenditure carries some terrific rewards you can earn yourself some nice little extras.

What is the cost of having a credit card?

Many card providers will charge an annual fee for their credit card. This may be waived in the first year to tempt you in but after that there will be an annual charge. The lowest card annual fees we have seen start at around $100 and go up to $400 or $500 for premium credit cards.

What kind of benefits can I expect?

The card providers offer a vast choice. The kind of rewards that get most people excited are hotel group reward points earning free nights, frequent flyer miles for free flights, and cashback deals that can earn between 1% and 5% cashback on purchases. That’s right folks, the cashback you can earn on your credit card purchases can exceed what you can earn in interest on your savings!

What are the potential pitfalls of a credit card?

Having a credit card does come with a degree of responsibility since your card provider will give you a credit limit based on your credit score and income. You are then able to use the card to spend up to that amount. It’s always important to remember that anything you spend has to be paid back and the APR or annual percentage rates on credit cards can be quite high (typically they range from about 15% to 24%). If you incur too much debt often you will be paying off little more than the APR each month.

How does a credit card balance affect my credit score?

If you run your balance at anything up to around 30% of your credit, there is unlikely to be any effect on your credit score if you make at least the minimum monthly balance payment each month. If you are consistently late paying or miss payments or simply use every available cent of credit that you have, you should expect some effect on your credit score.

How do I apply?