What To Look For When You Apply For Credit Cards

Chances are you might be interested in getting your first credit card or perhaps you would like some financial flexibility and want to add another credit card to your financial toolset. There are several things to watch out for when you apply for credit cards. Even though most major banks and credit unions back the most popular credit lending agencies Visa and MasterCard, there are still caveats you should keep an eye out as you apply for credit cards.

Know Your Rates

When most people apply for credit cards, they take the interest rate as the primary factor. Should you get a high rate of 21% interest or more it could take decades to pay off small amounts of credit should you make only the minimum payment allowed? What most people fail to realize is that some of the “teaser' rates the buy into when they apply for credit cards are usually for a small amount of time.

You may have seen this happen, you open your mailbox and there is a pre-approved credit card with an APR of 7%. What you need to do is read the fine print. Most of these rates are for 3 – 6 months. They want you to transfer existing balances so that the rate can readjust to a higher one once the grace period is complete.

Understand Penalties and Late Fees

When you apply for credit cards, you should also take in consideration of what would happen if you lost your job? Most credit card companies will offer credit insurance, should you lose your job, your payments are covered for one calendar year. This could come in real handy should you need to use your card during this period.

Apply for credit cards that only meet your financial goals. Some times people can take on too much debt and should their luck go bad, the repercussions can be overwhelming to their credit score. Get only as much credit as you think you need. Should the amount on the offer letter be more than you want, you can ask them to reduce the amount to a more manageable number.

Credit is a powerful tool should you use it wisely. Apply for credit cards that make sense and have low interest rates. Understand what is expected of you should you lose your job, it can mean the difference between a healthy credit history or seven years of rebuilding your financial empire.