A perfect world is a world without debt. But once you become an adult, you realize that this perfect world does not exist. At some point or another, losing all debt becomes your primary mission in life. With all these, unpleasant situations do arise out of nowhere. The worst part is that they catch you unprepared. Unless you are a money saver, chances are you got no other sources but a credit card.
These situations vary widely. Sometimes, you end up with a medical emergency. You cannot stand the toothache, so you need to see a dentist as soon as possible. In other cases, they are related to your preferences. Do you know that fancy pair of boots you have been eying for a few months already? It is on sale now and there is only one pair left in stock. To many people, this is an emergency, so they act accordingly.
All in all, before getting there, you need the actual card. This is when you have to do some credit card research. Beginner credit cards are not always as simple as they seem. Sure, choosing an issuer should not be as harsh as taking a dental root canal procedure, yet it implies getting some information. Credit cards are like chainsaws – they can be extremely useful, but they can also cut an arm if you are not careful. Despite all these, most people take these credit cards for an organizational solution. They organize finances and pay under one account, without working on the checking account. In the end, a little credit card research is the first step in making the final choice. Then, what are the most overlooked elements to pay attention to? How do you make a wise choice?
Interest rates – a real challenge
If you are like most people out there, you will inevitably look for a low interest rate. This rate applies if you carry the balance. Unless you pay within a specific period of time (one month usually), the interest rate kicks in and adds to your expenses.
First, find out what the interest rate is. It is normally given in a percentage. Most issuers do not give a precise number. Instead, they claim on somewhere between 10% and 20%. They also claim that their low interest rate starts at 10%. Since you are looking for beginner credit cards, you should know that you represent a slight risk for now. Therefore, you will probably qualify in the upper limit of the APR. Inquire personally before making a choice based on these ads.
Second, find out how long the interest rate lasts. Some issuers introduce low rates to lure customers in. These special offers are usually maintained for a year, then increased. This is what variable rates refer too. Ask precisely before signing anything and read every single letter on the contract (especially the fine print). Sometimes, a variable interest rate may not be too problematic, but make sure that you are comfortable with it before accepting the agreement.
A few other considerations include:
• Yearly fees
• Credit limits
• Grace period