Most of us are living in a world that is largely dominated by credit, making it as a source of power and drive to thrive each day. From student loans, mortgages to credit cards, the world uses credit. It can be overwhelming choosing the right credit card nowadays because of the many options available right now from basic type to Triple-Platinum Ultra-Points Perks Plus cards. One of the advantages of using a credit card is the unlimited choices available regardless of your financial situation.
It is important to consider your current debt load when choosing a new credit card, including student loans, car payments, and other credit cards you have. Exclude your property amortizations or mortgage to the computation because this is a different kind of debt. If your current debt load is more than 10 to 15% of your take-home pay, you may reconsider getting a credit card until you’ve paid off or paid down some of your current debt. While it is true that credit is very helpful, it can spiral out of control that fast so it is crucial to learn the art of financial discipline by knowing your expenses and prioritizing your needs and wants. It is crucial to determine the purpose why you want a new credit card because there are different types of credit cards for varying purposes. Are you planning to rebuild your credit? Then you can find one with a low-balance card to help you achieve this goal and obtain a higher credit score. Do you want to travel a lot? You can take advantage of travel points that credit cards provide for airline miles. Are you just wanting a credit card to address emergencies? You have to select a credit card with a low annual fee to save on these types of fees for a card that you’re not really using that much. Do you always shop in particular outlets or stores? You’ll need one that offers a great percentage off your purchases.
When choosing a credit card, you need to also consider your spending habits. If you are always shopping in bulk, you may want to get a credit card with low interest rates and a larger credit limit. Before you get a new credit card, you need to determine the ideal interest rate you can pay because you don’t want to end up paying higher interest rates than you actually spent. If you have a better credit score, your interest rate will be lower. If you use credit card frequently, an annual fee is not a huge issue, but if you rarely use it, then you need to compare the annual fee against your spending balance. You can use a credit card validator to allow you spelling out exactly what is happening with your credit card.