10 Questions You Should Ask Yourself Before Applying For A Credit Card

by Andy Hough on June 19, 2011

The following is a guest post on behalf of Financial Facts.
The temptation is great. Your mailbox, both physical and the electronic kind, are overflowing with offers from credit card companies trying to woo you to the dark side. But before you dive in to the credit card maelstrom, there are 10 questions you should really ask yourself before applying for a credit card.
1. Why do I need a credit card? Do you plan on using it for emergencies, for travel arrangements or do you just want one to have one? Maybe you wish to start building up your credit score. If you apply for a credit card just to shop, you might want to stop right there.
2. Do I have the financial wherewithal to handle a credit card? Of course you have to qualify, but your financial issues are more than what just appears on a credit card application.
3. Do I have the discipline to be responsible with a credit card? No, it’s not a weapon of mass destruction, but a credit card can be. If you don’t think you can refrain from impulse shopping, you might have a problem.
4. What is the interest rate? You want the lowest interest rate possible, but you might be willing to go for a rewards credit card or for other perks.
5. What is the grace period for payments, if any? Some cards offer a certain grace period before payments are considered late, and some don’t give you more than a hot minute. Make sure you know lest you make a late payment and incur those nasty late fees.
6. What happens if I don’t read all that annoying fine print? If you don’t read the fine print, chances are there’s something in there you’re going to wish you knew about. Chances are, that something is going to cost you a lot of money. Read the fine print and save yourself a headache.
7. Do I really want to fill out a credit card application right now? Every time you fill out a credit card application, it dings your credit score. If it’s only once or twice, it won’t be a big deal but if it’s more than that, your credit score could suffer.
8. What if I don’t want to divulge the whole truth? Then the credit card company, if it finds out and it probably will, could penalize you for fraud. Make sure all the information you fill out when you apply for a credit card is truthful.
9. What kind of a credit limit do I actually need? The line of credit on a credit card account is essentially a loan. Don’t apply for more than you need.
10. How many credit cards do I need? Only you can answer this question. Just keep in mind the more you have, the more payments you’ll have to make and the more you’ll have to keep track of. Keep it simple and manageable.

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