When it comes to applying for a credit card, there’s a lot of information you should make yourself aware of. Ignorance can be bliss in a number of circumstances, but not when it comes to your credit history, and your chances of being accepted for your first credit card. If you don’t do your homework, from interest rates to cash back benefits, it could prove costly to your bank balance.
Even before you think of applying, you must consider the reasons why you need a credit card in the first place. Understand the ins and outs of credit, whether it’s in-store or everywhere else, will go a long way to keeping your bills down, and your credit history in the green. Let’s take a look at some of the different types of credit card on the market.
Know The Difference
All credit cards may look the same, except for a few colour features, but that doesn’t mean that they charge the same interest rates or have the same benefits. Furthermore, not every credit card is suitable for every person – there are some credit cards out there that are specifically tailored to spending habits and lifestyles.
There are some ‘no-frills’ cards, where what you see is what you get. Interest rates are around average, and so is the cash back. However these benefits might only last for 3-4 months, and then the rates are hiked up and the benefits are gone. There are also credit cards for specific people, like students. Student credit cards off lower interest rates, and some benefits related to the student lifestyle, like cheap train fares. However these credit cards have very low spending limits, some as low as £50, to ensure students don’t get into more debt.
If you know what types of credit cards are on the market, then it will make it a lot easier for you to make an informed choice when selecting one. Price comparison websites are great for instantly checking hundreds of credit card rates all over the UK, from interest and benefits to cash back and spending options. Always make sure you visit one of these websites before you sign on the dotted line.
Don’t Be Influenced By Rewards
Although there are credit cards that offer great benefits and cash back, that doesn’t mean that their interest rates are any good, or last for a decent amount of time. You might be able to get the best of the benefits for one or two months, but after that the interest will sky rocket, and you’ll be left with a hefty credit card bill.
Always take a look at the missed payment fees before you enter into an agreement with a credit card company, and make sure you know the date you need to pay off your balance. No matter what credit card you decide to use, you should only spend what you can afford, and always pay back more than the minimum required balance.