7 Questions to Ask Before Getting a Credit Card.

Best Advice about Credit cards

A credit card is a bit like a sharp knife — it's a very handy tool, but it's capable of inflicting horrendous damage if used improperly. The same advice applies to both of them — choose the right tool for the job, and follow the safety rules.

Click on the link to know the answer about before getting a credit cards: https://cardinsider.wixsite.com/cardinsider/post/7-questions-to-ask-before-getting-a-credit-card

So when you choose to get a credit card, first ask yourself these seven questions:

1. Why Are You Considering Getting a Credit Card?

Are you considering getting a credit card to build credit? If this is the case, you need to make sure that you act responsibly with your card. You should pay off the balance in full each month, and not use your credit card for things you otherwise can't afford.

2. What is the Interest Rate?

Many cards will lure you with an introductory interest rate, or APR (Annual Percentage Rate), of 0%. While this may seem like a great deal at the time, be sure that you can pay off your balance during the promotional period. If not, you'll be forced to pay on your card with the new interest rate, which will probably be higher. It may even jump to 15-20% or higher.

3. What is the Credit Limit?

This is the amount of money that the credit card issuer is willing to let you borrow. Credit card issuers determine your credit limit based on various factors, including your income level and your credit score. Initially, they will often provide you with a low credit limit to minimize the risk. You can later increase your credit limit by paying on time and spending within your credit limit.

4. Is there an Annual Fee?

You should not pay an annual fee to use your credit card. Many cards try to offer you cash back or other rewards as long as you pay an annual fee with the card. But don't be fooled. There are rewards cards that do not charge an annual fee, so you should keep looking.

5. What are the Penalties Fees?

There's no shortage of ways for a credit card issuer to make money off you. Common charges include fees for transactions, such as balance transfers and cash advances, or for asking to increase your credit limit or make a payment by phone. There also are penalty charges for paying your bill late or going over your credit limit (they don't decline your card they just sock you with a fee for it).

6. What are the Rewards Offered?

Credit cards offer rewards that are unlimited and are spread across various sectors. So find one that aligns with your needs and has offers on things that you are interested in. They can be on flight tickets, shopping, cashback, hotel bookings, or gift cards. Do check how to redeem them though, some of them might have an expiration date.

7. Can you balance your Credit Utilization Ratio?

Credit Utilization Ratio is the percentage of your total available credit that is currently being utilized. It is significant to keep a check on how much you are spending irrespective of your credit limit. The credit utilization ratio also affects your overall credit health hence a higher utilization ratio cannot be considered good even if your repayment history is decent.