Before You Get A Credit Card, Read This

Credit card is a small piece of rectangular shaped plastic card that gives a person the ability to purchase anything within its credit limit with one swipe. One can pay on time and enjoy the perks and benefits of it or opt to delay your payment and pay more because of the added interest per month.

Credit cards guide

You’ve seen your Mom or Dad way back when you were young that they can buy stuff and items just by giving a small plastic card when they are ready to pay at the counter. It made you wonder how amazing this piece of card is, thinking you’d like to own one someday!

As you enter adulthood, you see a co-worker enjoying his new pair of shoes as he raves about it in the office because he got them for free. This was a reward since he had a good CS while using his credit card for a year. It made you so eager to also apply for one as you hear him tackle a lot of benefits he gets from it.

Then you thought to yourself, I want to learn more. So, what do you need to do? How do these things work?

How Does The Whole Card-Swiping Thing Work?

Applying for a credit card is not really that easy. You have to be employed or a business owner as the card issuers needs to check how capable you are in paying. You must submit an application form, along with your identification cards and proof of income. Most of the time, you start with this.

Unlike debit cards, a credit card let you purchase an item within your allowable limit and doesn’t take money out of your bank right away. It lets you pay in terms like on a monthly basis. Card activities are all saved per account and you can review them from time to time.

What’s good about it is that you will gain points if you have a good credit standing and some issuers or banks give discounts and amazing items as a reward. On the other hand, bad standing will stain your name and give you tons of additional fees and interest so let’s not go there. Find out if you’re the type of person who should or should not be going around carrying a money card.

Your Credit Card Dictionary

Financial planning tips

Annual Fee – any fixed costs that is charged annually (yearly basis). This is usually used in bank payments, insurance, memberships, or any organizations that requires a yearly payment.

Interest Rate – This is the balance of an amount borrowed in which a lender charges to the borrower as an interest. It is the amount or proportion a bank or lender charges as a fee to the borrower monthly or annually.

Credit Limit – this is the maximum amount a borrower can use under his/her account. The allowable amount one can use to purchase without cash.

Balance – account balance is the remaining amount an individual has left in their checking or savings account

Billing Cycle – this is a measure of time from the end of one billing to the start of the next billing statement.

Incentives – a form of reward may it be cash or an item given to an individual with a good standing.

Penalties – a form or negative reinforcement that adds to one’s payment as an interest due to delayed payments.

How To Apply For A Credit Line

Do I really need to get one? What will I use it for? Is this a necessity for me?

Always think back if this is a priority for you and if it will make your life easier and not place you under a bloody pit of debt. If you are a person who gets tired of going back and forth the cash machine to get money and pay for your items, then getting a credit will be really helpful so you can do cashless payments. One swipe and you’re done paying your dues.

However, if you are someone who can’t stop yourself from splurging into shopping then you have to think this through. You might get yourself into trouble and be haunted by your monthly dues.

Some may say credit cards are very practical because there is a set limit to what you can only spend. Your credit limit is always set according to your ability to pay. Most people opt to use this for their day to day purchases as this is more convenient and everything can already be paid via online portals and in any stores we go. More and more are going cashless. If you are already on your way to getting one then here are some tips to remember.

How To Maintain A Good Credit Score

improving credit score

Always check your spending habits. Again, credit cards come with interest rates and if you are a shopaholic and can’t get your hands off them then think twice in getting one.

Annual Fees and Interest rates should be checked first when you apply. Remember to look for interest rates and annual fees that are fit with your budget. Don’t aim for bigger credit limit offers and has hidden fees with over the top interest rates. You might drown in debt. Also, make sure that you only go for companies that are legit and trustworthy. For more information, you can visit sites like

Incentives and Penalties should also be considered. Go for ones that will give you perks and rewards when you pay on time so you can maintain a good credit standing. Look out for penalties as well and make sure their rules and regulations are reliable.

As for other fees, make sure you check everything before signing the contract as you might get into hidden fees and get into trouble. Spending wisely is your own doing but getting into these kinds of fees will really make a hell out of it. Lastly, whenever you spend make sure you have the ability to pay for it and that you only spend according to your credit limit. Make sure you pay on time so you can enjoy the rewards and not the penalties.

Credit cards are convenient to use but it will turn your life upside down if you don’t use them wisely.


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