It’s time to become a responsible cardholder!

Avatar
By:
Checking Credit Card

Ok, so you want to apply for a new credit card, as you’re looking forward to building your financial portfolio. That’s an excellent decision! Because, if you didn’t know, such cards are excellent for building credit score, as long as you’re using them wisely and don’t carry monthly balances.

However, as in many situations, preparation is key! Below you will find a few tips you should take into consideration if you want to become what we can call a responsible cardholder!

Start with budgeting

As we all know, it’s easy to fall into credit cards’ trap and end up with some ridiculous debt. That’s why our recommendation is to create a budget that should allow you to pay off your credit card monthly. By doing this, you won’t carry monthly balances and avoid paying interest on your debt.

Pick something with lots of rewards

Many credit cards offer rewards for the purchases you make most often, whether we’re talking about traveling, eating out, or shopping at specific retailers. Get your hands on one!

Even more, there are issuers offering special rewards periods, which translate into discounts or bonuses if you use your card at specific moments. These can save you tons of money, especially when buying holiday gifts.

Planning to carry a balance? There’s something for you!

With a bit of research, you can come across cards with low or 0% introductory rates for specific periods of time. Also, if you don’t need to carry a balance, you can pay the card faster, taking advantage of lower interest rates, especially if you are able to pay more than the minimum payment.

Constantly look after your credit score

As mentioned above, a credit card is a great instrument for maintaining a good credit score, that’s why it’s highly recommended to check your card regularly. Besides keeping track of your spending, this will also help you identify any kind of fraudulent activity on your accounts.

Finally, always remember to avoid letting your balance surpass 30% of your credit card limit, as a higher percentage can have a negative impact on your score. And you definitely don’t want that!

Be careful with annual fees

Remember that a lot of credit cards can have some…hard to ignore annual fees, which you should be very cautious about. Unless your spending habits justify how much you will pay each year, of course.

Never apply for multiple cards over a short time span and once you apply for one, expect receiving offers for many others. Applying for more than one card in a short period of time can impact your credit score, as each and every application triggers an inquiry. These don’t have a long-term impact on your scores, as long as you have established credit, but multiple inquiries within just a few months can affect your credit-building attempts.

Of course, these are just a few recommendations for new and future credit card holders, as this list could go on! However, we believe we cover all the essential info those who are new to them should be aware of and hope it will come in handy!

Personal loan
>