Credit cards sometimes get a bit of a bad rap, but as long as you use them correctly (and smartly), they can actually be a great addition to your life. From helping to reduce the cost of existing debt, to earning you air miles and lifestyle discounts (for example, 2-4-1 cinema tickets and meal deals), they can prove to be the perfect little tool in your purse.
If you’re considering applying for a credit card, the first thing you need to do is research. However tempting it is to sign up for the first one you see and however busy you are, make time. Us girls don’t just buy the first pair of shoes we see without trying them on, or comparing them to others, so apply this rule of shoe to credit cards. Taking time to compare the cards available will ensure you get the right one for you, that will also add some lovely little perks to your life. Here are some factors to think about when choosing the right credit card.
Pick a card to suit your lifestyle
If you travel a lot, it makes sense to get a card that awards air miles for spending. Many cards also offer free airport lounge access (something we’ll all agree is a lovely pre-flight treat), and most come with other fab benefits in the shape of discounts at restaurants, half-price or free cinema tickets and even cash back. If you’re going to be using a card, you may as well get as many perks from doing so as possible. So do that research (as boring as you may think it is) and spend time comparing the credit cards available to make sure you get one that will reward you. Remember, that invested time now, will pay off later.
To fee or not to fee?
Your first response to the suggestion of paying an annual fee may be something along the lines of, “Why would I want to pay to have a credit card when I can get one for free?” and that would be very fair. No one wants to pay money for something if they don’t need to, right? And the same applies when it comes to credit cards. However, rewind a little. Before you write off an annual fee card, find out what you’re actually getting for the fee. If the benefits come in the shape of things/activities you would spend money on anyway, you’ll quickly get the fee and more back. Again, a perfect example is that airport lounge access. If you sometimes would pay for that anyway and now with the credit card you get it as a perk, the annual fee might pay for itself.
No annual fee credit cards are great if you just want a card for emergencies, or for buying and paying for things off and online without having any added extras. But for a small annual fee, you could be getting so much more from your plastic.
IMPORTANT NOTE: Always read the small print when selecting a credit card – I really can’t stress this point enough. Don’t get stuck paying an annual fee if you weren’t expecting to.
Make paying your bill easy
We’re all busy enough as it is, so paying bills needs to be as easy and as pain free as possible. When you’re selecting a card, make sure you consider how and where the payments need to be made. Can you pay online? Is there a branch or payment ATM convenient for you? Don’t put yourself in a situation where you have to drive around town every month to try and pay a bill. That will be as stressful as it sounds and it could maybe lead to you missing a payment – something you really don’t want to do.
Transfer a balance
If you already have a credit card, or multiple credit cards, and are struggling to pay them all off in full every month, getting a card which allows you to make a balance transfer could be a good option. Some banks have credit cards which offer balance transfers and very low interest rates, or even zero per cent. That means all of your debt moves to just one card which means less stress and less chance of you missing your payments.
It’s easy to get carried away with spending when you have a credit card. The ‘Oh, I’ll just stick in on my card and pay later. It will be fine…” mentality is so easy to slip into. Don’t. Constantly remind yourself a credit card isn’t an additional salary, or a never-ending supply of ‘free’ cash. Use and manage your card wisely and don’t miss any payments, and very quickly, you’ll start to enjoy all the benefits. Being slack in both your thinking and your management of a credit card could lead to excessive monthly payments, which an quickly turn into a financial nightmare.