how to apply a credit card

Things to consider when applying for a credit card

Once you’ve decided to get a credit card, there are many more decisions to be made. While the plethora of different deals, prices and types of credit on offer can be confusing, it’s important to take the time to really understand credit terms and conditions to make sure that you apply for the right card for you and your budget.

There are a number of different credit cards to choose from. Standard credit cards have a set, industry standard interest rate and annual fees, while platinum credit cards generally have a higher annual fee but usually include a range of extra benefits. These can include better rewards programs, complimentary insurance and a range of other services. Another option to choose from is a prepaid debit card, which can be used like a credit card (in machines and online, for example) but uses your own money.

When deciding which credit card suits you it is important to compare the different credit card terms and conditions offered by different banks and financial institutions. To effectively compare credit cards, take these credit card features into consideration.

–          Annual fees. Almost all credit cards have an annual fee, which varies between financial institutions and banks. Usually, annual fees are determined by the credit card limit and the kind of rewards and extras offered.

–          Limit. When you are approved for a credit card, you will be approved for a certain limit that you can spend. You may be approved for differing amounts if you apply to different institutions, so think carefully about how you handle your finances and what an appropriate limit is. The credit card with the highest limit might not necessarily be the best card for you – particularly if the interest rate is high and you have difficulty making payments on time.

–          Interest Rate. Payments made on credit are always subject to interest if not paid off on time, making the interest rate one of the most important factors in your choice of credit card. As a credit card owner, it is important that you are aware of how much interest you are paying on any given amount spent should you not make your payments on time.

–          Rewards. In order to attract as many customers as possible, banks and financial institutions offer rewards programs for their customers. Such programs can wield real benefits for credit card owners. On many cards, every dollar spent on accrues points which can then be redeemed.  Many credit cards are also linked to frequent flyer programs. Cards with higher limits and annual fees usually offer the best rewards for their customers.

There are a number of things to consider when deciding which credit card to apply for and which financial institutions’ services you would like to use. Just as you would comprehensively compare mobile phones or home loans before making any decisions, make sure you consider all factors and options when considering which credit card you will apply for. Sites like www.whistleout.com.au can be helpful in showing features side-by-side.