Financial Fitness > Establish Good Credit > Choosing the Right Card
When used responsibly, a credit card can help you establish good credit by demonstrating your financial responsibility and timely repayment. This can, in turn, improve your credit score. But beware… credit cards can be a slippery slope. They provide ease and convenience — and allow you to spend money you don't have. This can be a recipe for disaster and excessive debt.
If you feel that you're ready to create good credit by using a credit card responsibly, then it's important that you choose the right card. Review the questions below for any card you are considering:
2. What is the interest rate?
Interest rate or annual percentage rate (APR) is the rate you will pay if you carry over a balance from month to month, take out a cash advance or transfer a balance. There are several types of APR, and a card can have multiple APRs:
3. What is the credit limit?
The credit limit is the maximum amount the cardholder is allowed to use for purchases. If you exceed the limit, you may have to pay a fee.
4. What are the associated fees?
Credit cards charge various fees for services, maintenance or membership. Common fees include:
5. How widely is the card accepted?
Because of merchant/lender agreements, not all credit cards are accepted everywhere. If you want to use your credit card while traveling internationally, you need to figure out whether it is issued and/or accepted outside of the United States.
6. What services and features are available?
Many credit card companies offer perks, or incentives, to use the card. Common services and features include:
7. Shop around!Before deciding on a credit card, compare cards and review fees using Bankrate or Credit Card Insider.
Not sure which credit card is right for you? A Financial Fitness advisor can help. Schedule an appointment today.