Comparing First Time Credit Cards
The opportunity to apply for and be approved to own a credit card should not be taken lightly. With conscious, deliberate decisions a credit card can tremendously improve your credit rating and can allow you to accurately monitor your spending habits.
First time credit card applicants should spend time in researching which credit card(s) will best serve his or her needs. If you already possess a good credit score, you may be offered much better rates and cards with extra benefits such as frequent flyer miles or cash back. If you are just starting out or do not have great credit already, you can use a credit card to improve your credit rating by always paying on time. As your credit improves, you may be able to move the balance on an average rate card to a card with a much lower rate.
The internet is a great place to search for first time credit cards. Be sure to read the fine print, as that is where you will find the information on the rate you will be charged. If a fixed rate card can be found, that will ensure consistency in the amount charged on any balance that you hold. Variable rates can fluctuate with the market and leave you owing quite a bit more money that you had intended. The rate is not as important in the decision process if you plan to, and know you can, pay off the full balance each month – then no interest will be added to your account. Often a low fixed price rate will be offered as an introductory offer, but can expire in a few months.
Also, some low rate cards do include an annual fee regardless of whether or not you carry a balance. Having a credit card can help you monitor your expenditures with accuracy. Rather that paying for some items with cash, some with checks, etc – you can make all payments with a credit card and automatically receive a monthly itemized statement. This will allow you to easily see where you spend the bulk of your income, and importantly, your expendable income.
Just remember to pay it off each month. For example, if you purchase a latte each morning and pay cash, it does not seem that you spend a lot on it. However, with your detailed monthly credit card report you may quickly see you are spending several dollars a day on that habit. A credit card can provide a basis for preparing a monthly budget which will allow you to save quite a bit of money in the long-run.
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Young Adults And First Time Credit Cards
When a young adult is considering first time credit cards, there are several important things to consider.
First, one must consider the interest rate that is being offered to them. Interest rates on credit cards are often extremely high. It is not uncommon to see a credit card with an interest rate of 20% or more. The higher the interest rate, the more money you’re going to be charged when you carry a balance. It should be noted that the best practice when using a credit card is to only purchase things you already have the money for, or know you will be getting the money for before the credit card is due. This way, you can pay off the balance each month, and avoid any interest charges. If you do this, then the interest rate the company wants to charge you doesn’t really matter.
Another important detail to consider is the grace period being offered. The grace period is how many days from the time you make a purchase with the credit card that they will begin to charge you interest on that purchase. This period is typically 28 days, however it is possible for it to be more or less than 28, and in some cases it can even be zero. Those are the sorts of credit cards one wants to avoid. One of the most basic features of a credit card is the credit limit. The credit limit is how much money the company will allow you to spend on the card before paying some of it back. For a student card, this is typically $500 or $1000. Credit limits can be up to $10,000, or sometimes even more, for people with good credit ratings.
It should be noted that the company will often let you spend a little bit more than your credit limit (about 10% or so), before they begin to decline transactions. You must be careful not to do this, because if you do, the company will charge an “Over-limit fee” of $20 or more. Finally, it is important to look at the features offered by the particular card you are considering. Many options exist, ranging from cards that will earn you free tickets to movies as you spend money, to cards that earn you free airplane tickets, to cards that will even give you a percentage of the money you spend on things back. You must choose the best option for your needs, and carefully weigh the options.
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First Time Credit Cards For College Students
As a former college student, I am able to speak from the position of the fastest growing age group of new debt consumers. I found myself in school broke, stressed, depressed and credit cards, at least I thought, were my best friends. Now they have become my worst enemy.
The late night meal charges, impulse purchases, are an addiction, and the fees charged to your account or horrible. First off, the late night meal charges were my best friend. Living the college life, and partying hard led to the demise of my credit cards. I would head home 2 maybe 3 in the morning on a good night and cooking was the last thing i was about to do, so Jack in a Box here I come. Riding home with a car full of broke, hungry friends did not help either as I believe in feeding the “needy,” so with four other hungry individuals my purchases rapidly would grew from $6 to $30. In a semesters time I am now over my credit limit and in horrible debt.
All in all if you are a college student or a hard clubber, you might wanna steer clear of first time credit cards. Secondly, the impulse purchases. It really seems the simple convenience of having the credit cards is the bait that lures us into debt. A simple trip to the mall to see a movie or eat a quick meal with friends, always ends in window shopping and eventually spending. The displays are set-up so beautifully that one will instantly go into “I want or I need that” mode. The simple process of being able to pull out that plastic, slide it and sign it happens so fast it’s like an addiction, another topic I will discuss later.
A pleasant trip to the mall turns into a full fledged shopping spree, in which I’d always end up leaving the mall with so many bags I needed help loading them into my car. It is truly an addiction that can ruin your life like any other drug around. Thirdly, the seemingly addictive nature these credit cards bring is a nationwide outbreak. My friends and myself included, have accumulated so much debt over the years, that the simple leasing of a new car or purchasing a house is impossible.
Many organizations review your credit score for cellphones, jobs,housing, and transportation. Credit card addiction can actually prevent you from be able to live your life as a productive citizen. Something as simple as leasing a car, or buying a home, the very things that we value as human beings can be completely destroyed by credit card addiction. The stress brought on by credit card addiction can corrupt one mentally and physically just as cocaine,alcohol, and prescription drugs do many individuals worldwide. Isn’t it amazing how so many man made creations have ruined man himself?
To anyone considering credit cards I say “Just Say No” to credit. Work hard, save your money and practice self-control over your spending habits.
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