If you are a recent graduate and have just landed your first job, then now could be the time to apply for a credit card since you may need credit cards to address your short term lending needs such as paying for shopping, dining, travel or any online payments etc. Owning a credit card comes with a number of benefits and it can help you to improve your creditworthiness and manage your money. Of course, finding a credit card that is right for you is crucial and that is why you need to always compare credit cards before getting one. So, with this in mind, what do you need to know about credit cards? Lets discuss.
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How Credit Cards Work?
When you get a credit card, it will come with a spending limit that relates to your needs and your income. This will be your monthly spend limit and, when you make purchases with this card, it will be deducted from this limit. Therefore, at the end of the month, you will be left with a bill that has to be paid. Depending on your arrangement, you can either pay off a minimum amount that is determined by the bank to avoid fees or you can pay it off in full each month. However, you will need to be mindful of interest fees as this can mean that any purchases you make and that can mean your bill will increase significantly.
What are the Benefits of Using Credit Cards?
In the wrong hands, a credit card can be a dangerous tool but when used correctly, it can be extremely useful. It enables you to manage your money in a way that allows you to work around your income. An example of this would be paying for a specific bill today, in preparation for your wage to be paid tomorrow. They can help you to organise and manage your expenses in an efficient way.
When you use a credit card for purchases, you will also benefit from an added level of protection. Ultimately, you are spending someone else’s money and so, if your credit card becomes a victim of fraud, the banks tend to deal with very well. Unlike a debit card, your bank account is not compromised, which means that your money is safe.
Additional Reading: Key Best Practices for Using Your Credit Card Wisely
Using credit cards to make purchases will also protect you should you have any problems. If you are purchasing an electrical item and it becomes faulty, you might find that your credit card has resulted in you having an extended warranty or even further protection.
Some credit card providers also offer rewards for purchases. This is especially good if you know that you will be using the card in places where you can achieve the most rewards such as traveling. This enables you to really benefit from having a credit card and so, it is worth considering this when comparing credit cards.
Your credit rating is everything, particularly now that you find yourself in employment. You might want to purchase a house, obtain a loan or buy a car, all of which will require you to have creditworthiness. If you use a credit card responsibly and regularly, you will find that your credit rating will increase and improve which will really help you later to get an approval of home loans, car loans and other lending needs because of a high credit rating you have maintained due to your ontime credit card payments back to the Bank or lender.
How Do You Qualify for Credit Cards?
There are a number of factors that determine whether you are eligible for a credit card. This will include your income as well as your age but also your credit history, If you meet all of the criteria then you will qualify for a credit card but if you fail to meet it then you might find that you are either declined the card or you are given a lower credit limit.
How Do I Choose a Credit Card that is Best for Me?
There are so many different credit cards to choose from offered by a number of large banks and many different providers claim to be offering the best deal. Therefore, it is important that you compare credit cards at mawazna.com. This will enable you to look at all of the available credit cards and select one that fits your specific needs.
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