Guide to Getting and Using Your First Kredittkort
If you are looking to get your first credit card you could get overwhelmed with all the offers and companies out there. Credit card companies provide a lot of fun key words, like low-interest, 0% APR, and no annual fees. These are all things to look at before applying for your first credit card, but if you don’t understand it, all the offers won’t mean anything to you.
Understanding Your Credit Card Offer
There are so many things about your credit card offer that can be confusing. Not every credit card has the same benefits, rates, and terms. It is important to understand what the terms are for the credit card you choose, so you understand how to use it to its fullest capacity. Below are some key benefits that many credit card companies may offer.
Interest:
Interest is the amount the credit card company charges for borrowing money from the company. The interest rate is expressed with an annual percentage rate, or APR. This percentage determines how you will be charged based on the balance of the card. The average APR is 18 percent. The higher your credit score is, the better APR rates you can be approved for.
Fees:
Credit cards have a few fees to understand. The first is an annual fee. While some cards don’t charge for its use, some might require an annual fee. This fee is usually added to the credit card statement every year. Most credit cards will also charge a late fee if you don’t make your payment on time. These can be avoided by making the minimum payment on time every month. Over-the-limit fees will be charged to your account if you exceed your credit limit. Cash advance fees are the fee you will be charged if you take out a cash advance from your credit card.
Perks:
Credit card companies may offer perks and benefits to convince you to choose their credit card over others. Cashback rewards with cards is one of the most common perks. Cashback gives you money back for certain purchases. Some cards provide cashback for gas, groceries, travel, or entertainment. Airline miles give you miles you can redeem for air travel or even hotels. These are accrued with purchases made on your card. A lot of cards have blackout dates with their airline miles so make sure you understand the limits of this reward.
When looking for a card that works for your lifestyle, make sure to do research. You can check out this beste kreditt kort guide to help make the right decision for you. When looking at credit card options, make sure you look at all the fees, benefits, and the interest rates. Once you have found a credit card that works for what you need, applying is simple. Before you apply, check your credit score. The higher your score, the better rates you will get.
How to Use Your Card
When you get a credit card it is important to build healthy habits when using it. If you use your credit card incorrectly you could end up paying for it in unmanageable amounts of credit card debt. As a first time card buyer, it is important to make sure you keep on top of your credit card so you don’t damage your credit score. Here are some tips to make sure you are a credit card rockstar.
Pay On Time:
By paying on time each month you avoid late fees and decreasing credit scores. If you miss a payment, you could see your credit score start to decrease after 30 days. By paying on time you can also avoid paying more in interest than you need to.
Pay the Full Balance:
If you are able to pay the full balance on your card every month you will not accrue interest. If you end each month with a balance, you will end up paying more than you should on the interest charges.
Stay Below the Limit:
Don’t get close to the limit and definitely don’t go over your credit limit. When you overcharge your card your credit score will decrease. Stay below the limit, preferably below 30 percent to maximize increasing your credit score.
Use the Card:
This one is important to understand the balance of using but not over using the card. If you don’t have any transaction history, it will not help increase your credit score. But, if you overuse it and can’t make payments, you could end up with too much debt. It is helpful to use it for purchases that you will already be making, and then transfer the money from your bank to your credit card immediately before you forget.
Your first credit card can be a huge benefit to your future financial success if you take care of the payments and stay on top of your spending habits.
