Why You Should Apply for a New Kredittkort
Whether you have a credit card already or this is your first one, applying for a new credit card can be overwhelming and exciting. There are many reasons you might need a new credit card. Credit cards can create a sense of financial safety for unexpected expenses. It can also be a great way to build credit. Credit cards, when used properly can be a great way to become more financially secure. However, when credit cards are used improperly, they can be a huge financial burden in your life.
When to Get a New Credit Card
Getting a credit card should not be a last-minute decision. It is best to make the decision to get a credit card before you need it and when you are in a good place financially. When you are ready to Søk Kredittkort the more information you have, the better your chances are of making a good decision. When getting a new credit card, look at all the options you have and what you need the credit card for.
It is a good idea to get a credit card to help build your credit. By taking on a line of credit, you are showing future lenders that you have experience working under the constraints of a loan. If you are using a credit card to build credit, it is a good idea to use the credit card like your bank card, spending only what you have in the bank. When you start spending more than you make you will find yourself in credit card debt, which is hard to climb out of.
Using the card is encouraged. If you don’t use the card, it doesn’t actually build credit. Your card should be used regularly and paid off every month. If you cannot pay the entire balance every month, you should pay the minimum balance. If you cannot pay off the entire balance, you will end up paying interest on the charges.
Planning a Big Purchase
Using a new credit card can help you make a big purchase. Some cards have promotional “no-interest” for a certain amount of time. If you can get one of these promotions, you could end up making that purchase and paying it off before interest starts to accrue. Some necessary purchases are not within our monthly budget, so having a card to make that purchase while you pay it off over several months is the only way to be able to buy what we need.
Planning an International Trip
Most credit cards offer no foreign transaction fees. When you purchase something internationally with a bank card you could be charged anywhere between 1 to 3 percent of the transaction total. If you are planning an international trip, it is a good idea to get a credit card that does not have foreign transaction fees. Having a credit card is also just safer because you won’t have to carry as much cash while traveling.
High Balance on Another Card
If you have an outstanding balance on a credit card with a high interest rate, moving that credit to another card with lower interest can save you money.
When Not to get a New Credit Card
It’s not a good idea to get a credit card if you are struggling financially. A credit card should not be used as a way to get out of debt or try to live outside of your means. When you apply for credit cards, the more information you can get the better off you will be.
Mortgage or Loan
If you are looking at or about to take out a loan or home mortgage, it is not the best time to get a new credit card. Opening a credit card requires a hard inquiry on your credit score, which can lower that score. This signals to your lender that you could be a credit risk. This can lead to your loan being denied or less desirable terms.
Multiple Hard Inquiries
When you apply for a lot of lines of credit, each application has what is called a hard inquiry on your credit score. These inquiries are not a big deal when it happens every once in a while, but if it happens often, it can lower your credit score. When your score is lowered, you won’t get the best rates for credit cards. You want to apply when your credit score is at its highest.
A credit card should elevate your financial standing, not decrease it. A credit card should not be used to get out of tough situations. If you are already struggling to pay your debt, adding another line of credit is not a great idea.
Before You Apply for a Credit Card
Before you apply for a credit card, it’s important to take a few steps before you start your application.
- Understand your motivation: knowing what you want your card for can help you pick the right credit card for your needs.
- Check your score: Check your credit score and make sure your score is high enough to get the terms you want.
- Read the fine print: Before you apply, make sure you know all aspects of the loan you are agreeing to.
- Apply: Apply for the right card for you based on the research you have done.
If you still need more information on whether or not applying for a credit card is the right move for you, check this article out.