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CREDIT CARDS: The Truth, The Whole Truth, Nothing But The Truth

by Babs Iverson 11 months ago in how to · updated 11 months ago
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CREDIT CARDS: The Truth, The Whole Truth, Nothing But The Truth
Photo by Stephen Phillips - on Unsplash

Plastic, plastic money, and bank card are some of the names people use to refer to their credit cards. Zillions of purchase payments are made every day. While not sure if it is zillions, it's a large number. Anyway! Should you apply for a credit card? How many credit cards should you have? Are credit cards bad or good? Truly, these are only a few of the questions people wonder about and ask themselves every day. Let's try to answer these questions and more.

Applying for a credit card has become super easy and simple with a click on the computer, you are approved or denied in a matter of minutes. Since it's fast and easy, you should slow down and take your time when considering applying. Life happens! You might have an unexpected expense. You see a credit card offer with 18 months zero interest that sounds irresistible. On the other hand, at times, it feels like you are bombarded with ubiquitous credit card offers by mail, email, and in the Facebook feed.

Should you apply? Above all, you should pause and think it through. Do not rush in! Repeat! Don't rush! By taking a few minutes to consider and evaluate these questions, you will save yourself a lot of headaches and heartaches later on. Will there be discretional income for the credit card payment? Are you able to pay the full balance each month? What is the annual fee? Is there a zero annual fee? What is the interest rate? Is there a zero APR credit card for an extended time period?

If you answer no to the first question, stop right there and do not apply for a credit card. However, if you can answer yes to the first question, you move to the second question. If you can't pay the full amount each month, again, you might want to consider stopping there.

On the other hand, if your answer was yes, you move to the next question. Evaluating the annual fee, will the expense fit into your budget. Of course, No Annual Fee is the best option. Naturally, the interest rate is a major factor when considering a credit card. The interest rate should weigh heavily on your decision to apply or not apply. By paying the full balance each month, you can avoid paying interest. If you carry a balance, will you be able to make the payments plus the interest? If not, don't apply.

Notably, a credit card offering zero APR for 6 to 24 months, it's imperative that you pay the balance owed before the end of the stated period. If you fail to do so, you will be responsible for all the interest that accrued on the credit card account.

If you are considering applying for a second or any additional credit card, you should consider how long since you have last applied for a credit card? How will it affect my credit score?

When applying for a second or additional credit card, you should try to space the cards two years apart, if possible. Submitting too many applications, you risk a greater chance of being denied. In addition, by applying for too many cards within a short time frame, your credit score will be affected. In fact, your credit score will be negatively impacted! This might be for a short time, or it could be longer. Consequently, it depends on other factors such as current balances on your credit profile, timely payments, percentage of credit usage, and any derogatories on your credit history.

Reading and hearing stories about people having an extreme number of credit cards, you wonder. Have you wondered about the number of credit cards you should have? There is no right or wrong answer to this question. It all comes down to your income. The chief concern is not to overspend and overextend your income and your budget.

When it comes to multiple credit cards, you should consider each cards' rewards and benefits. With rewards and benefits ranging from a percentage back to gift cards and miles, do your research. Selecting your preference, you pick and choose. The bottom-line! Whether you have one card or multiple cards, you are responsible for the payment each month. So, you should follow some rules:

Pay off the balance every month!

Make sure you are receiving your benefits or rewards!

Don't make a purchase that you can't afford to pay cash for!

Without question, credit cards are a good tool. When used responsibly, you can earn fantastic rewards. However, if utilized incorrectly, the credit card could lead to awfully bad consequences. Life happens! Don't burden yourself with credit card debt.

In summary, you should consider the pros and cons of opening a credit card account. Taking your time before you apply, you should consider your income and budget. Act accordingly. Don't take unnecessary risks. If you have the income to make the full payment each month, you are in good shape for building your credit history. If used wisely, a credit card in your wallet is an excellent tool.

Writer's notes: Thank you for reading. This is dedicated to my grandkids and to my readers. If you liked this, please heart. Tips aren't necessary, but if you can, tips are appreciated.

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About the author

Babs Iverson

Barbara J Iversen, also known as Babs Iverson, lives in Texas and loves her grandkids to the moon and back. After writing one story, she found that writing has many benefits especially during a pandemic and a Texas-size Arctic Blast.

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