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Overwhelmed by the Complexity of Cards? This May Help

How to Smartly Choose a Credit Card

We are living in a world that is greatly dominated by credit, and this is what makes us thrive. The world will not survive without credit and this is one of the things that we need to be well-knowledgeable of, from student loans, mortgages to credit cards. With the wide array of new credit cards available today from basic type to Triple-Platinum Ultra-Points Perks Plus cards, it can be overwhelming choosing the right credit card these days. Whatever is your financial situation, there are so many choices of credit cards available and being offered in the credit card industry.

When choosing a new credit card, you have to take into consideration your existing debt load such as student loans, car payments, and other credit cards you have. Do not include your mortgage in your calculations as it is not considered as a similar debt. If your existing debt load is more than ten to fifteen percent of your take-home pay, you have to reconsider obtaining a credit card until you have paid off or paid down some of your existing debt. While it is true that credit is very helpful, it is important to achieve a full control of your expenses, prioritizing your needs and wants. There are different types of credit cards for different purposes, that’s why you need to identify the reasons why you need a new one. Do you want to rebuild your credit? You can obtain a higher credit score by looking for a low-balance card to help you achieve this goal. Are you planning to tour the world? You can take advantage of travel points that credit cards provide for airline miles. Are you just wanting a credit card to address emergencies? You have to select a credit card with a low annual fee to save on these types of fees for a card that you’re not really using that much. Do you always shop in particular outlets or stores? You’ll need one that offers a great percentage off your purchases.

When choosing a credit card, you need to also consider your spending habits. If you’re always shopping in bulk, you may want to get a new credit card with a lower interest rate and a higher credit limit. Avoid paying higher interest rates than you actually spent so be sure to compute the interest rate before getting a new credit card. Generally, those people with a good credit standing get a lower interest rate. If you use credit card frequently, an annual fee is not a huge issue, but if you rarely use it, then you need to compare the annual fee against your spending balance. Credit cards come in perks and offers, but you need to know what is exactly going on with your credit card with the help of a credit card validator.