Is a credit card right for you?
Before you commit to any credit agreement, you should always ask yourself a few searching questions, just to make sure that you’re making the right decision. This is particularly important when taking out one of the many credit cards UK consumers have access to in today’s market, as it is far easier than you might think to end up with money problems thanks to reckless use of the plastic in your purse.
So, is a credit card the right option for you? To work this out, ask yourself the following questions:
- Am I the right age?
A very basic requirement to apply for a credit card is that you’ll need to be over 18. However, with some credit cards and with some lenders, you may even need to be 21 or over to be accepted.
- Can I afford to pay back what I borrow each month?
It’s easy to forget that you are borrowing money when you spend on your credit card, but you are and you’ll need to pay it back. If you can’t clear the whole balance when your monthly bill comes in and you only pay the minimum or a part of the balance, you will end up paying interest on what you owe. Do this every month and having a credit card becomes a whole lot more expensive. You need to be sure that you won’t spend beyond your means, and that you can pay off everything you spend each month, before taking out a credit card.
- Am I organised enough to pay my credit card bill on time?
Being late paying your credit card bill, or missing a monthly payment completely, is pretty much guaranteed to land you a charge or penalty from your credit card issuer. If you are a disorganised and forgetful person, you should either schedule direct debits to pay your credit card bill or steer clear of credit cards altogether.
- What shape is my credit history in?
You can only get approved for a credit card if you have a good enough credit rating. This means that you have a history of paying your bills and your debts on time, allowing you to have built up a reasonable credit score. Check your credit score at a credit reference agency (free as part of a trial or for a small fee), as if your score is too low, you could be rejected when you make a credit card application. If you are rejected, this goes on your credit record and could make your credit score even worse.
