If you are considering taking a leap of faith and getting a credit card, there are a number of factors you must consider beforehand. It may seem like a simple and straightforward process from start to finish or your bank may be encouraging you to do so in an attempt to boost your credit score, but it still requires a great deal of thought, care, and, perhaps most importantly, research ahead of time. If you are pondering your options when it comes to getting a credit card, continue reading to find out everything you need to know.
It can build your credit score
If you are looking to build your credit score, a credit card may be a great idea for you. It is one of the main reasons why a growing number of young people are opting for credit cards regardless of whether or not their finances allow for it. If you decide to get a credit card, your issuer will report your credit card activity to credit bureaus on a monthly basis and this information, which is compiled into a credit report, will form the basis of your credit score. It is worth remembering, however, that failure to educate yourself on the various pros and cons of owning a credit card, avoiding paying in full or on time, or exceeding your credit limit can achieve the opposite effect and lead to a poor credit score.
Its due date can be changed
If you have steered clear of credit cards due to strict due dates, it may benefit you to know that its due date can, in fact, usually be changed. This is largely dependent on which provider you choose, but it can allow you to align your bills with payday and consolidate your payments. In what is one of the key perks of changing your credit card due date, however, it can also allow you to avoid recurring bills and, as these perks outline, achieve greater flexibility and personalisation when it comes to your long-term financial security.
It can trigger late fees
If you accidently miss a payment or have recently changed your due date, you may be liable to pay late fees. It may not seem like a particularly big deal at first, but it can get expensive fairly quickly depending on how late your payment ends up becoming. In most countries, late fees are subject to limits and tend to fluctuate annually or in line with how many missed or late payments are attributed to your name. It is unlikely to negatively impact your credit in the long run, but it can be recorded on your credit report if it ends up becoming significantly late and, as a result, potentially damage your credit score.
It can be difficult to manage fraud
If you have done your research when it comes to credit cards, you may have stumbled upon the widespread problem of credit card fraud. It may provide you with greater safety and security when compared to a debit card, but it can also be significantly difficult to manage. If you find yourself falling victim to credit card fraud, it is worth remembering that it is the credit card company’s money that is at stake, you are not liable to pay any fees, and a replacement credit card is relatively simple and straightforward to organise. If you fail to educate yourself on the steps required to reverse or resolve credit card fraud, however, you may end up making a costly or time-consuming decision you will come to regret down the line.
It can take time to qualify for the best credit cards
If you have perfected your credit score to boost your chances of qualifying for a credit card, it may come as a blow to learn that you have failed to qualify for the best credit card on the market. This is, however, more than likely due to the fact that first-class rewards, perks, and bonuses tend to be reserved for customers with excellent credit scores or longer credit histories or that meet specific income requirements. It can, therefore, take time to qualify for the best credit cards but this can allow you to avoid annual fees.
If you have done minimal research and have made the decision to get a credit card for the first time in your life, there are a number of factors you must consider beforehand. It may, therefore, benefit you to know that it can build your credit score, its due date can be changed, it can trigger late fees, it can be difficult to manage fraud, and it can take time to qualify for the best credit cards. If you are committed to boosting your financial security, however, it is definitely an avenue worth exploring further.