Those of you that are just starting off your financial lives are probably starting to look into credit cards. Though there are many people who assume that credit cards are a bad idea when it comes to spending money as they can easily lead to debt, the simple fact of the matter is that credit cards are an excellent way to help you not only keep tack of what you spend but also build up your credit score and start a health credit history. This leads us to the heart of this post, how do you find the best credit cards for beginners.
There are many different perks that one can be gain by using credit cards but as beginners with little to now credit history, you will probably be very limited when it comes to getting approved for certain types. So, basically what we are going to talk about is what you should look for in your first credit card and what you should be looking to avoid.
One of the first things that come to mind when you think of one of these cards are the fees. Although it may be tedious, it is important to read all of the fine print that is associated with the card that you are applying for. Credit card companies are literally making money hand over fist each and every time a customer swipes their card and there is no reason what so ever that you should have to pay a monthly fee. So, rule number one is, never pay any fees just to be able to use a credit card. No monthly fees, not transaction fees, no yearly fees, no membership fees.
Another important aspect that should be examined when choosing a credit card is the APR, or annual percentage rate. This rate will determine the amount of interest that you will pay on the money that is borrowed for a period longer than one month. You see, credit cards are essentially free one month floating loans. What ever you purchase today with your credit card will not need to be paid till next month. While this seems good in theory, you can really rank up some serious debt if you do not use the card wisely. Any debt that can not be paid from previous months will be charged interest and that rate is dependent on the APR that the creditor associates with your card. As a rule of thumb one should try to never pay interest by keeping a balance on their credit card but it is definitely better sage than sorry, so.... Make sure that you take a look at the APR when you are applying for a credit cards, the lower the better.
The last tip that I have to share with is to look for credit cards with perks. These perks are totally free and can be quite valuable in many cases. There are credit cards that offer cash back, free credit checks, certain discounts, and many other perks that make using a credit card well worth it.
So, you will have to weigh your options so to speak, and figure out which one of those aspects, listed above, is most important to you. This should give you a much better idea of what you should be looking for in a credit card for beginners.
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