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Things to consider before applying for credit cards

Undoubtedly there are different types of credit cards available in the financial market. Beginning from credit score building ending with fulfilling the emergency requirement of fund nowadays credit card is enough to solve every financial problem. Although you have chosen the best suitable one for yourself, do you know everything about it? 

During applying for a credit card, a person generally looks at the highlighted points. Without going deep when one selects a particular card and realizes that it is not perfect for him, he begins the problem. For this reason, before applying for a credit card, you need to ask questions like,

  • How can I find a suitable credit card company in the UK? 
  • What is the total requirement of the fund through a credit card?  
  • What are the pros of using a credit card? 

Let us discuss these questions in brief so that they will become easy to understand. 

How can I find a suitable credit card company in the UK? 

While searching for a suitable credit card in the UK, we suggest going for those cards with zero processing fees, even sometimes no maintenance fees. Unfortunately, it is not easy to find out the best deal while searching for credit cards, especially in the UK, because several finance companies provide several discounts and offer high or low-interest rates. 

Whereas a particular type of credit card is best for bulk shopping, another is perfect for consolidating debt. Some cards represent lifelong interest-free repayment, while some offer free interest only for first-time users and that too for a certain period. By holding reward point credit cards, while users may enjoy redeeming earned points, other credit cards may charge you high interest. 

Money lenders of Ireland often look for good credit score, which majorly depends upon timely repayment of the outstanding amount. Therefore, a good credit score and repayment history play an integral role in making one eligible for borrowing money. That is why be wise while choosing a credit card. 

What are the necessary factors to consider before selecting one?

Although there are many questions to consider before picking one, here are discussed the most prominent ones. 

  • Charges: Perhaps you have been told by the credit card company about the costs. While providing a credit card, the issuing company may ask you to pay nominal charges to attain service calls and the card. 
  • Apart from paying the initial charge, a user also needs to pay additional expenses like card maintenance fee, card unblocking fee, new card issuing fee and many more. In addition, some cards come with a monthly charge, while some come with a yearly payment. Depending upon the amount, you can select a card. 
  • Rate of interest: Usually, the rate of interest is applied to the outstanding amount. The interest amount is charged highly on users who don’t repay the monthly installments on time. Sometimes, even after paying monthly dues timely, the rate of interest remains high.

If you don’t have the ability to pay high interest rates, it is better to move forward with no-interest credit cards. Although the credit limit will not be that high, you can still enjoy the benefit of a credit card.

  • Gift: There is a particular credit card that offers attractive gifts in exchange for every purchase. Apart from skills, such credit cards help users to earn reward points that can be turned into cash at any time. Therefore, if you like to earn extra by using a credit card as a payment mode, it will be just perfect for you. 
  • Complete interest-free period: To attract customers, many credit card companies used to offer interest-free borrowing. Some keep this offer for intermediates, while some keep it for a particular repayment period. Therefore, if you are a beginner, then an interest-free credit card is just the best suitable. 

What is the total requirement of the fund through a credit card? 

Every financial company sets a credit limit for a particular card. Usually, the credit limit is set by analyzing different factors of the applicant. These are- 

  • Repayment history
  • Previous credit score
  • Monthly income 
  • Repayment ability 
  • Monthly expenditure 
  • Ongoing loan 
  • Type of organization working with (e.g., private or government)

But generally, every single credit card company starts offering financial help from a minimum of €1000-€5000. However, the credit limit can be low if a person is representing a comparatively lousy credit score. 

Although there are many factors, the credit score to be offered chiefly depends upon previous credit scores and current financial stability. So, before applying for a credit card, make sure it saturates the requirement of the fund.

What are the pros of using a credit card? 

  • It improves your credit score. Whenever a person goes to the lender for borrowing money, the first thing that he will look for his credit score. A credit card can be the easiest way to improve a credit score because a lender will agree to lend money based upon the score. 
  • A credit card can resist you from defaulting charges. Sometimes, users face the problem of unauthorized charges levied upon cards. While it is hard to understand the exact reason for the payment on a debit card, you can easily find it on the debit card. 
  • By using a reward credit card, it will be easy to earn more while borrowing money. A card user can earn reward points, cash backs, coupons, and different offers with every transaction. 
  • Apart from reward points, one can quickly earn the extra benefit of insurance added with credit cards. For example, some companies provide traveling insurance and road-accident coverage to their credit cardholders. 

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