Have you been debating applying for a credit card because you feel you aren’t ready? Are you at crossroads wondering whether or not you need one?
Some people usually feel like they don’t need credit cards, and it’s okay to feel that way. However, there may also be signs showing that getting one would be a good financial decision for you.
If you are new to credit cards and are unsure if you are ready to enter the credit world, read on. This article will share 4 signs that you are ready for your first credit card.
1. You Have No Credit History
If you don’t currently have a credit card, you may not have any credit history. While opening a credit card account is not the only way to build credit history, it is the most common.
Credit history is important for all sorts of things today like buying a house and even renting. Getting your first credit card and using it responsibly will help you establish a credit score.
The longer you have a credit product for, the better, as the length of your credit history is also an important factor in your credit score and your ability to get future loans or credit.
2. You Have Limited Income
Typical beginner credit cards usually have lower credit limits, which means that your card issuer can quickly approve your applications even if you only have a limited income.
To figure out how much you need, check out the median household income within your city to get a rough estimate. Having a credit card can help you make it from month-to-month during periods when your income is less than sufficient.
3. You Need to Borrow Money In the Future
If you feel you might apply for a loan in the future either to buy a home or a car, then this is the right time to think of applying for a credit card. This is because it will help you build your credit score and credit report. This helps when applying for loans and may even help you qualify without any issues.
4. You Are Financially Responsible
If you have shown yourself that you are financially responsible, you may be ready to take on the added responsibility of a credit card. If you are able to budget your money, avoid overspending, pay your bills on time, and save money each month, you will likely be able to handle this line of credit.
Cards offer the safest ways to pay but they can also be dangerous if you do not pay them back promptly. These cards usually carry double-digit interest rates meaning that even borrowing a small amount might be a nightmare when it comes to paying it back. Paying back your balance fully each month will help you avoid any interest charges or late fees.
Bottom Line
If you are not sure whether you need a credit card, these 4 signs should help make your decision easier. However, it’s important to note that not every card can work for you. Make sure to do your research, and read all the terms and conditions before you apply.