Things to Know Before Getting Your First Credit Card

Taking out a credit card is pretty much a must these days. It’s not simply a matter of convenience – it’s a basic requirement for certain things, such as purchasing freely on the internet, booking plane tickets, and more. Sure, there are workarounds for most of those, but a credit card can make most of those processes a piece of cake.

In addition, you’ll get to benefit from various attractive reward programs and loyalty bonuses. This is a deal you can’t really get with anything else. Credit cards are somewhat unique as a financial tool in this regard, and learning to take full advantage of them is important. With all that in mind, here are a few tips to keep in mind before signing up for your very first credit card.

Pay Attention to Interest Rates

Interest rates are by far the number one factor you’ll want to consider when comparing credit card offers. You’ll find that every company on the market pretty much does its own thing, and it’s hard to talk about any unified rules that you can rely on. Things get even messier when you realize that some of the best interest rates are offered as temporary promotions that you may not find available every time you look.

In the end, this will be the most critical factor in your research. You’ll have to make sure that you’re getting the best interest rate your current situation allows for. And if the available options aren’t too attractive, perhaps it’s time to think about improving your situation in the first place.

Can Your Improve Your Credit Score First?

Which brings us to our next point. Your credit score will be the main deciding factor when trying to get good conditions on your credit card. If you want to maximize your chances at getting a good deal, your focus should be on fixing any issues you might have with your credit history. Pull your report and see what your score is right now. Go through the list and see if there are any suspicious entries that you might be able to get removed.

And if you can afford to wait a few months before taking out your credit card, it would be a good idea to use that time to improve your credit score as much as you can. Pay off any outstanding lines of credit that you might have, and be on point with all your bills. Small things like these can add up quite fast in building a good score that will impress creditors.

Take Advantage of Special Programs and Promotions

We already touched on this above, but it’s important to expand a little. Many companies that offer credit cards will run various promotions from time to time, which can give you access to special conditions on your credit card that you might not be able to get otherwise. Things like lower interest rates, extended repayment periods, 0% interest rate grace periods, and more – many companies can get quite creative with their offers in order to entice new customers.

Of course, take a look at the fine print. If a deal sounds too good to be true, there’s probably a little more to it than meets the eye. As long as you keep your eyes open, you should be able to avoid problems of this type.

Be Prepared to Actively Use It

A credit card only makes sense if you’re prepared to actually use it on a regular basis. It’s considered a line of credit with respect to your credit report, which has certain implications. One of them is that keeping your card unused can drag down your credit score over time. This may not always be the case, but it’s worth keeping in mind if you want to avoid unpleasant surprises.

As long as you plan ahead and know what your financial capabilities are though, this shouldn’t be a problem. It can actually be a bit freeing to make certain purchases with your credit card, and know that you have until the end of the month to pay them off. The only potential problem here is if you start getting irresponsible and careless. Just because you’re allowed to pay later doesn’t mean that you should do this for every single thing that you purchase. That’s actually a good way to find yourself in financial distress.

When used right, a credit card can be a great addition to your financial assets. It can expand your range of options in any situation, and can give you much more confidence in dealing with daily financial matters. But it’s important to use it carefully, and always make your payments on time.

Tips for Maintaining a Stable Financial Situation

The prospect of living with debt is not a fun one, but unfortunately, it’s something that a large number of people have to face today. If you’re not careful, it doesn’t take much to slip up and find yourself in a world of trouble. And if you’re careless or unlucky enough, sometimes that trouble can last for quite a long time.

Preventing these kinds of situations is not easy, and takes persistence. But as long as you lay down some good foundations and stick to your principles in the long run, you should find it perfectly feasible to keep your finances in check and prevent the worst from happening. Sure, you will still have the occasional incident to deal with – but you’ll be much more prepared, and that’s what’s truly important.

Have an Emergency Fund

The best thing you could do to improve your long-term financial stability, by far, is to have an emergency fund. It doesn’t have to be a major one, but you should do you maintain it as high as possible. An emergency expense can quickly snowball into a much larger problem looming over your shoulders if you can’t deal with it straight away.

Plus, anything can happen. Finding yourself out of a job can be a tough situation if you have no money saved up. But if you’ve got 4-6 months’ worth of expenses lined up, possibly even more, you can approach the situation with a much calmer, more collected attitude. You’ll be able to take your time researching new opportunities, and you won’t have to feel desperate for any kind of job.

Keep a Good Credit Score

Keep an eye on your credit score as well. This is something many people ignore until they realize they need it, and at that point it’s usually far too late to make any viable adjustments. Your credit score is an indication of how well you’re able to repay debts and handle bills in general, and having a good one can make a world of a difference in terms of the kinds of deals you’re offered on the market.

This can affect you in many ways – from the interest rates on your loans, to the availability of certain financial products. A good credit score can completely transform your life, and is something you should not underestimate. Omacl, a UK based payday loan company has some great advice on the subject of interest rates.

Don’t Go Overboard with Saving

Saving money is important – as we described above – but there’s a certain point where you’re going to start seeing diminishing returns. Letting your money just sit idly in a bank account doesn’t make sense if it’s starting to grow to a significant sum. At that point, it’s in your best interest to look into investing and other similar opportunities. Don’t delay this too much – the sooner you get started, the more you stand to profit in the long run.

Of course, keep some lower threshold for your savings and don’t cross that. The whole point of those investments in the first place is to earn extra money. It’s never a smart idea to cut into your main savings just so you can invest a little more.

Be Patient

Rushing into a financial decision is one of the biggest mistakes you can make if you want to maintain a stable situation. And yet, it’s also one of the most common ones we see in modern society. There’s a tendency among many people to be careless with their money and to disregard some obvious warning signs, and that’s not a good sign for the future.

It doesn’t matter if it’s a small decision – like upgrading your smartphone – or a bigger one, like purchasing a new car. You must always take your time and weigh your options carefully. Of course, there are some situations that will require fast thinking and the ability to critically analyse every bit of information you have available. But those are rare and you’ll definitely know when you’re dealing with something like this.

Know Your Options

Which brings us to our last point. You should always keep studying the list of options available to you in your current situation, and know what’s available at any time. This takes minimal effort nowadays with the help of the internet, and it’s important if you want to stay afloat. When the time comes to take out a loan, you’ll have much more confidence in your ability to pick the right product. The same applies to smaller financial decisions as well.

Developing a responsible attitude to your finances will take time and effort, and you’ll have to make some sacrifices along the way. But it’s one of the best things you could do for yourself if long-term stability and peace of mind are important to you. In our current financial climate, this will become more and more true over the next years.