5 Mistakes People Make When Choosing A Credit Card
Choosing a credit card is daunting but necessary in order to build good credit. It is understandable if you aren’t sure where to begin. Financial matters are complex and heavy with importance. Heed these tips for what not to do when applying for a credit card.
Skipping Your Homework
Before rushing to complete an application, you should know the basics. What do you know about APR, credit, debt, grace periods and more? Make sure to research both industry terminology as well as the major companies before picking a credit card. The internet is full of amazing resources on the wide-ranging topic. Plus, you can always contact Citizens National Bank for advice.
Falling for Marketing Ploys
We all get mail claiming we’re pre-approved for credit cards, urging us to apply. But don’t go with the first company that comes calling. It may feel like all credit cards are the same, but that’s just not true. Interest rates, benefits and policies vary. NerdWallet has a nice comparison tool that breaks down the differences. Take time to narrow down your list to only options that appeal to you and come with fair terms.
Going Flashy, Not Practical
While many credit cards promise an array of amazing features, not every perk is right for you. Keep your monthly budget and financial goals in mind as you research. Get a card that works for your life and is affordable. You don’t want something that will encourage bad habits, like a rewards card that makes you want to spend money on unnecessary items. Also, be aware of how your credit score comes into play. You may not be approved for your dream card. You can check your score for free on Credit Karma, which will also give you approval odds for various cards.
Sending Multiple Applications
Once you know which cards you are most interested in, it’s time to start those applications. But take it slow – sending too many applications at once can actually harm your credit score. As a result, your chances of approval will go down. Why does this happen? Multiple applications can make lenders think you are desperate, which makes you look like an unsafe investment. It is best to wait several months between sending applications.
Ignoring the Fine Print
Terms and conditions are notoriously boring and convoluted, but when it comes to credit cards, you need to be familiar with them before signing a contract. Don’t commit to a company without knowing all the details of your card’s balance, due dates, APR and potential fees. The more you know, the less like you are to be hit by unpleasant surprises down the road in the form of penalties and rising interest.