Factors to Consider Before Getting Your First Credit Card

Each credit card comes with an attractive set of perks to convince you to apply for it, such as cash backs or airline mile collection – but before you sign up, find out exactly what a credit card entails. It might seem easy to get by with cash, but having a credit card is necessary to build your credit history and maintain your financial health and creditworthiness.

credit card

Image credit: Hloom via Flickr

Therefore, before submitting your request, take some time to think about what you need from this card – knowing that it will make choosing the right one much easier.

Here are 3 factors to consider before getting your first credit menu.

1. Know what you are signing up for
Don’t apply for a credit card without first understanding the fine print. It can be frustrating trying to figure out the terms of a credit card, but it’s still important to know and understand the details up front rather than incurring unexpected fees and charges if you qualify. Before signing the credit card application, make sure you know exactly what you are getting into. Below is an example of fees and charges and eligibility when applying for a credit card:

Interest-free period 23 calendar days from the date of the statement if there is no balance carried over from the previous statement.

Interest on purchases The interest rate is 26.88% per annum. If full payment is not received by the due date, a minimum charge of $ 2.50 per month, calculated from the date of the transaction, will be charged to your account.
Interest on Cash Advance 28.92% per annum not the amount withdrawn subject to compounding if the monthly interest charge is not received in full (minimum charge of $ 2.50).

  • Late payment fee $ 100 if minimum payment is not received by payment due date

  • Annual fee $ 192.60 (main card)

  • $ 96.30 (additional card)

  • Cash advance fee $ 15 or 6% of the amount withdrawn, whichever is greater

  • 21 and over

  • Annual income of $ 30,000 and more for Singaporeans and Singapore PRs

  • $ 45,000 and more for foreigners
    (The above fees and charges and eligibility are taken from the OCBC website.)

2. Your spending habits

Before you start choosing a card, ask yourself these questions:

  • Can I pay for the purchase in full each month?

  • Or do I intend to pay the minimum amount required and carry the balance from month to month?

  • If I renew the remaining amount after paying the minimum amount, can I pay the additional charges incurred?

  • Is this card only intended for emergencies?

The truth is, being responsible for your credit card activity is essential as it will reflect positively on your credit report. Using your credit card responsibly and paying in full each month will help build a strong credit history that could be of great benefit to you when applying for a car loan or mortgage. Having a credit card in your wallet doesn’t mysteriously lead to debt, but it can help improve your credit score because it’s calculated based on past and current credit activity.

3. Advantages of the credit card
When it comes to choosing the right credit card to use, there is no one size fits all. Everyone has different needs and desires. You need to identify the main purpose of the card and find the one that best suits your personal needs. For example, if you are looking for a refund card for everyday purchases like groceries or gasoline, check to see if the credit card offers any special benefits for the places you frequent. It’s worth doing a little background reading.

While credit cards have all of the above benefits, in addition to the obvious benefits like earning cashback and airline miles, it is important to be a responsible user.

If what you read above has been helpful to you, you should follow Credit Bureau Singapore (CBS) Facebook to learn more about this information and even tips on how to stay solvent!

The post office Factors to Consider Before Getting Your First Credit Card appeared first on iCompare loan resources.

About Mildred B.

Check Also

Cash Advance Apps vs Payday Loans: Which is Better?

(NerdWallet) – If you’re asked to imagine a payday lender, you might think of a …