Debating whether to apply for a credit card? You’ve come to the right place. Credit cards aren’t right for everyone, but for some, they can be invaluable financial tools. To help you decide if a credit card is right for you, keep reading.
Should I get a credit card?
If you aren’t sure whether to get a credit card, consider the following scenarios. Below is a list of scenarios in which it might make sense to get a credit card.
- If you recently turned 18: Most credit card issuers require cardholders to be a minimum of 18 years old, so if you recently had your 18th birthday, now might be the time to apply for your first-ever credit card. Since credit cards help you build your credit history, opening one early can have serious benefits in the long term.
- If you have a high credit score: The higher your credit score, the more likely you are to be approved for a credit card. So if you have a credit score of 670 or greater, this could make it worth applying.
- If you want to build credit: No matter your financial goals, building credit is a necessary step. Whether you hope to buy a house or be approved for a car loan, having a strong and lengthy credit history can help you. One of the simplest ways to start building credit is with a credit card.
- If you have an upcoming vacation: There are all kinds of credit cards out there, but some of the most popular are travel credit cards. If you’re a frequent traveller or just even have a vacation coming up, applying for a credit card that offers travel perks can be a smart move. Such credit cards may come with travel insurance for trip delays or cancellations, free pieces of luggage, or other benefits like no foreign transaction fees.
Now, we move on to a few situations when applying for a credit card may not be the wisest choice:
- If you frequently spend more than you have: If you are prone to overspending, a credit likely isn’t for you. Spending more money than you can reasonably afford can be dangerous and lead to lots of debt and interest that is hard to stay on top of. You should only get a credit card if you are prepared to use it responsibly, which means paying off all debts on time and in full each month.
- If you lost your job: One factor credit card issuers consider when reviewing applications is income level. If you recently lost your job and do not currently have income coming in, your odds of being denied a credit card are much higher. There are consequences to applying for a credit card and being denied, such as a reduced credit score. For this reason, it is recommended that you wait until you secure another job before applying.
- If you recently applied for another credit card, line of credit, or credit product: Applying for and obtaining a lot of credit in a short period can be a major red flag to lenders. Plus, every time you apply for a new credit product, an inquiry will appear on your credit card. The more inquiries there are, especially if they occur in a short timeframe, the lower your credit score will be.
