Credit Cards, Insights

What to Know Before Getting a Credit Card

flik eco finance personal what to know before getting a credit card

If you're thinking about getting a credit card, it's important to do your research first. There are a lot of different types of credit cards out there, and each one has its own set of benefits and drawbacks. In this blog post, we'll discuss what you need to know before applying for a credit card. We'll cover topics such as interest rates, annual fees, and rewards programs. By the end of this article, you'll be able to make an informed decision about whether or not a credit card is right for you!

What is a Credit Card?

A credit card is a plastic card that gives the cardholder a line of credit with which to make purchases or withdraw cash. Credit cards are issued by banks, credit unions, and other financial institutions.

There are many different types of credit cards available, each with its own set of benefits and drawbacks. The most important thing to do before getting a credit card is to research the different options and find the one that best suits your needs.

Here are a few things to keep in mind when choosing a credit card:

  • Annual Percentage Rate (APR): This is the interest rate you will be charged on any balances you carry from month to month. It's important to find a card with a low APR so you can avoid paying a lot in interest.
  • Rewards: Many credit cards offer rewards programs, such as cash back or points that can be redeemed for travel or other perks. If you think you will use the rewards, look for a card that offers the best program for your needs.
  • Fees: Some credit cards come with annual fees, balance transfer fees, and foreign transaction fees. Be sure to read the fine print so you know what fees you'll be responsible for before signing up for a card.

What Are The Different Types of Credit Cards?

There are many different types of credit cards on the market. Some offer rewards for spending, while others offer low interest rates. Some credit cards even offer cash back on purchases. It's important to understand the different types of credit cards before you apply for one. That way, you can choose the card that best suits your needs.

Here are some of the most common types of credit cards:

Rewards Credit Cards

These cards offer points or miles for every dollar you spend. The more you spend, the more rewards you'll earn. Rewards can be redeemed for travel, merchandise, or cash back.

Low Interest Rate Credit Cards

These cards have a lower interest rate than other credit cards, which can save you money if you carry a balance.

Balance Transfer Credit Cards

These cards offer 0% interest on balances transferred from another credit card. This can give you some breathing room to pay down your debt without accruing more interest.

Cash Back Credit Cards

These cards give you a percentage of cash back on every purchase you make. The amount of cash back varies depending on the card, but it can be as much as five percent.

Can You Use a Credit Card Everywhere?

The short answer is no, you cannot use a credit card everywhere. There are still many places that only accept cash or checks. However, credit cards are accepted in more places than ever before. You can use your credit card to make purchases online, over the phone, and in person at most stores.

What Are The Different Types of Credit Card Deals?

There are a few different types of credit card deals that you should be aware of before you apply for one. The first is the introductory rate, which is usually a low APR that lasts for the first six months to a year. After that, the APR will go up to the regular rate. There is also the balance transfer deal, where you can transfer your balance from another card with a higher interest rate to a new card with a lower interest rate. And finally, there are cash back and rewards cards that give you points or cash back on your purchases.

What is a Secured Credit Card?

A secured credit card is a type of credit card that requires a deposit to secure the line of credit. The deposit is usually equal to the credit limit. For example, if you have a $500 deposit, you'll have a $500 credit limit. Secured cards are often used by people with bad or no credit history. They can help you build your credit by making on-time payments and keeping your balance low.

What is an Unsecured Credit Card?

An unsecured credit card is a type of credit card that does not require a deposit. These cards are available to people with good or excellent credit. Unsecured cards typically have higher credit limits and better rewards than secured cards.

What is The Difference Between Secured Credit Cards and Unsecured Credit Cards?

The main difference between secured and unsecured credit cards is that with a secured card, you have to put down a deposit that becomes your line of credit. An unsecured card doesn't require a deposit, but usually has stricter requirements for approval. If you're new to credit or have limited credit history, a secured card may be a good option to help you build your credit.

What is APR?

The Annual Percentage Rate (APR) is the cost of borrowing money on your credit card. It's important to know what APR you'll be paying before you get a credit card, because it can impact how much your payments will be.

What is a Grace Period?

A grace period is the amount of time you have to pay your bill before interest is charged. Most credit cards have a grace period of 21 days, but it's important to check with your card issuer to be sure.

What Are Late Fees?

Late fees are charges that are assessed when you don't make your minimum payment by the due date. Late fees can range from $25-$35, so it's important to always make your payments on time.

What is a Cash Advance?

A cash advance is when you use your credit card to get cash from an ATM or bank. Cash advances typically have a higher APR than regular credit card purchases, so it's important to only use them in emergencies.

What Is a Co-Signer?

A co-signer is someone who agrees to sign a loan or credit card application with you. The co-signer becomes responsible for the debt if you can't make your payments. Co-signers are often used by people with bad or no credit history. They can help you get approved for a loan or credit card, but they're also taking on a lot of risk.

What Is A Balance Transfer?

A balance transfer is when you transfer your balance from one credit card to another credit card with a lower interest rate. Balance transfers can save you money on interest if you're carrying a balance on your credit card. However, they can also be costly if you're not careful. Balance transfers usually have a fee of around $50, and if you don't pay off your balance before the intro period ends, you'll be stuck with a high interest rate.

What Are Cash Back and Rewards Cards?

Cash back and rewards cards are credit cards that give you points or cash back on your purchases. These cards can be a great way to save money on your everyday spending. However, they typically have higher interest rates than other types of credit cards.

How Do You Avoid Paying Interest on a Credit Card?

The best way to avoid paying interest on your credit card is to pay off your balance in full every month. This means that you'll need to be disciplined about not spending more than you can afford, and make sure you always have enough cash set aside to cover your bill.

If you can't seem to keep up with this strategy, or if you're carrying a balance from month to month, it's probably time to reevaluate your budget and see where you can cut back. There's no shame in admitting that a credit card isn't right for you at this stage in your life - it's better to be honest with yourself than end up buried in debt.

In short, getting a credit card is a big responsibility. Make sure you're prepared to handle it before taking the plunge.

Can I Get a Credit Card With Bad Credit?

The short answer is yes - but it will come with some caveats. If you have bad credit, you're likely to be approved for a secured credit card. This type of card requires a deposit, which acts as your credit limit.

If your credit score is low, you may also be approved for a subprime credit card. These cards typically come with higher interest rates and fees than traditional cards - so use caution before signing up.

How Long Does it Take to Be Approved for a Credit Card?

The time it takes to be approved for a credit card depends on the issuer, but it usually takes about two weeks. In some cases, you may be able to get instant approval if you apply online. However, this is not always the case. If you are not approved instantly, the issuer will likely conduct a hard pull of your credit report, which can temporarily lower your score by a few points.

Can I Get a Credit Card on The Same Day I Apply?

The answer to this question is unfortunately, no. Even if you are approved for a credit card on the same day you apply, it can take up to two weeks for the physical card to arrive in the mail. This means that if you're hoping to use your new credit card right away, you'll need to have another form of payment handy.

What Are The Benefits of Getting a Credit Card?

There are a few benefits of getting a credit card. One is that you can use it as a way to build your credit score. If you make your payments on time and keep your balance low, you'll start to see your score improve. This can help you out in the future when you're looking to take out a loan or buy a house.

Another benefit of having a credit card is that it can act as a safety net in case of an emergency. If you suddenly need money for an unexpected expense, your credit card will be there to help you out. Just make sure that you don't overspend and end up in debt!

Finally, having a credit card can also give you perks like cash back or rewards points. If you use your card wisely, you can end up getting a lot of free stuff just by using your credit card to make everyday purchases.

So what are you waiting for? Start shopping around for the perfect credit card for you! Just be sure to do your research and read the fine print before signing up. That way, you'll be sure that you're getting the best deal possible. Happy shopping!

Do You Need a Credit Card?

Not everyone needs a credit card. If you don't think that you can handle the responsibility of having one, then it's probably not worth it to get one. However, if you think that you would benefit from having a credit card, then go ahead and start shopping around! Just be sure to do your research first so that you know what you're getting yourself into.

If you decide that you do want a credit card, then the next step is to figure out which one is right for you. There are a lot of different cards out there, so it's important to take the time to compare them and find one that suits your needs. Once you've found the perfect card, be sure to use it wisely and always pay your bills on time!

What Are The Risks of Getting a Credit Card?

If you're considering getting a credit card, there are a few things you should know first. Credit cards can be very helpful in building your credit history and establishing good credit, but they can also be risky. Here's what you need to know about the risks of getting a credit card:

  • Your spending could get out of control. It's easy to charge more than you can afford when you have a credit card, especially if you're not paying attention to your spending. Once your balance gets too high, it can be difficult to pay it off.
  • You could end up with a lot of debt. If you carry a balance on your credit card from month to month, you'll end up paying interest on that balance. The interest can add up quickly, and before you know it you could be in over your head.
  • Your credit could take a hit. If you miss payments or make late payments, your credit score will suffer. That can make it harder to get approved for loans or other lines of credit in the future.
  • You could be tempted to spend more than you should. Having a credit card can make it easier to impulse buy items that you may not be able to afford. It's important to be mindful of your spending and only charge what you can afford to pay off each month.

If you're considering getting a credit card, weigh the risks and benefits carefully before making a decision.


About Jermaine Hagan (The Plantsman)

Jermaine Hagan, also known as The Plantsman is the Founder of Flik Eco. Jermaine is the perfect hybrid of personal finance expert and nemophilist. On a mission to make personal finance simple and accessible, Jermaine uses his inside knowledge to help the average Joe, Kwame or Sarah to improve their lives. Before founding Flik Eco, Jermaine managed teams across several large financial companies, including Equifax, Admiral Plc, New Wave Capital & HSBC. He has been featured in several large publications including BBC, The Guardian & The Times.

Related Posts