7 Things to Know Before Applying for Your First Credit Card

Are you thinking about applying for your first credit card? Before you begin your search and fill out an application, there are a few things you need to know.

1. The benefits of a credit card. In short, you want to know why this is a good idea from a financial perspective.

2. The potential risks of carrying a credit card. Despite the many benefits, you may soon realize that there are some drawbacks as well. You must make sure you avoid these at all costs.

3. The interest rate. If you don’t pay off your balance in full each month, you will be charged interest. The lower the rate the less you will pay, so you definitely need to consider this as your compare offers.

4. The fees you could be charged at some point. Regardless of the credit card you choose, there are sure to be some fees involved. For example, you’ll be charged a fee if you make a late payment. Along with this, an annual fee may come into play.

5. If you will collect points for each dollar you spend. Not every offer is a reward credit card, but there are many of these out there. If you’re going to use a credit card, you might as well earn points for doing so.

6. What you can do to protect your information. Now that you’re carrying a credit card, it’s a good idea to learn more about safety and security. The last thing you want is for somebody to steal your information, thus using the card to make purchases.

7. How you’ll use it. You don’t need to know exactly how you’ll use your credit card, but it’s a good idea to have a basic strategy in mind. Will you use it to make every purchase? Just groceries and gas? Only emergencies?

When you address these points before applying for your first credit card, you’ll feel much better about what you’re doing.

Would you add anything else to this list? Share your thoughts with the rest of us!