Credit Card Factors

When you are choosing your card, there are a number of factors which you need to take into consideration before you formulate your decision. They include:

  • Age – You must be over 18 to apply for a credit card.
  • Credit rating – Your credit history shows how responsible you have been about paying previous bills, and this information is used by the issuer in order to determine how much credit to give you on the card. You need to be able to show the issuer that you are deserving of their credit. Therefore, it is advisable to get a copy of your credit report before you apply for a credit card, so you can be sure that it is accurate and find out whether you have a good or bad credit rating.
  • Spending needs – How much do you think you will be spending on the card each month? This will help you determine how much credit you want to apply for, and also whether you need a card with an exceptionally low interest rate compared to other features. You may also need a card which has high or no spending limits.
  • How much you will use the credit card to buy travel – If you travel abroad a great deal, then it is advisable to get a credit card that gives you offers on insurance or baggage protection automatically when you use the card for travel expenses. This will stop you from having to incur further costs by buying them separately.
  • Payment structures – This refers to whether you will be able to pay off the full amount of your credit card every month, or whether you will be transferring balances through to the next month regularly. If you think that you can pay off the card each month then the APR you have on the card will not be one of the determining features. However, if you will maintain a balance on your card each month, make sure that you choose a card which has a low APR so you will not be paying too much in interest. Some credit cards also offer advantages to both these paying structures.
  • Special interests – You need to decide which of these are important when choosing your card For example, if you want your credit card to offer you additional features such as airmiles or cash back rewards when you spend money on the card. How much money you will be spending and what you will want to use the features for (e.g. airmiles if you travel a lot) will determine which card is best for you.
  • Number of credit cards you already own – Why exactly do you want another one? What do you want this credit card to do which none of your other ones already do?
  • Income – How much money you make will determine how much credit you are given by the issuer and what type of card you will be offered. One notable example is the AMEX Black credit card, which is only available for those who earn over a certain amount.