If you’ve been thinking about getting a credit card , you’ll no doubt have a number of questions in mind about your responsibilities when it comes to repayments and interest. While a credit card can be a useful tool to give you a little extra breathing space from one payday to the next, the decision to apply for one shouldn’t be made lightly.
Here we’re looking at what you should know before you get a credit card.
There are different types of credit cards
When you are investigating which credit card suits your needs, you’ll notice that not all cards are the same. Some will offer low annual card fees, while others will have lower interest rates . In addition, you can also have cards that are attached to various loyalty or reward schemes, such as frequent flyers.
However, one of the most important factors to consider when choosing your card is how much you are planning to spend with it. There is little use opting for a card with reward points but higher interest rates if you are not confident about being able to pay off your balance each month.
The interest rate on some credit cards can change
This is usually the case for credit cards that have an introductory period with low or no interest, also known as a ‘honeymoon interest rate’. If you see a bank advertising a card with zero fees or that is interest free for 12 months, be sure to enquire about the interest rate once the ‘honeymoon period’ is over, so you don’t wake up to a surprise later on.
How you use your credit card can influence your eligibility for loans later on
Your credit history can be viewed by credit providers when you apply for various loans or a home mortgage . For those who pay off their balance every month, and have no defaults in their past, a credit card can be a good way to strengthen your credit history, improving your chances of being granted credit later on. However, if you battle to pay off your balance on time, and have a history of late repayments, this can also be recorded on your credit report and can look unfavourable to potential loan providers.
For more advice about choosing the right credit card for you, don’t hesitate to contact our helpful financial planning team  at Beyond Bank.