How Do I Get a Credit Card

Nowadays, many people would like to ask “How do I get a credit card?” What is credit card? A credit card is a small plastic card that contains the identification information such as signature or picture, and authorizes the person named on it to charge purchases or services to his account. Credit card enabling its holder to buy goods and services based on the holders promise to pay for these goods and services.

If you want to get any type of credit card, for sure you must be at least 18 years old and must have a job or monthly income. Other than that, your monthly expenses such as rental and car payment should not more than half of your monthly income or your debt to income ratio will not exceed forty percent of your income. The next factor to be considered is your credit score. You must have a good credit score and a score over 700 is usually considered as a strong score. Factors which go into your credit score include whether your outstanding balances on your credit cards exceed 50% of the credit limit and other information such as collections, bankruptcy, and judgments which can appear against you. The forth factor which goes into play is how long you have been living at your residence and been at your current job. To be qualifying for credit card, you also should have a telephone in your own name and you must usually have at least an annual income of $12,000 to $ 14,000.

Why people so eager to get a credit card even have to pay interest rate for whatever purchases? There are many reasons for this question. One of the reasons is credit card can make it easier to its holder to buy things because some companies do not accept in cash term such as hotels or airlines. Credit card also provides additional protection to its holder. If it is credit card holder, then he/she doesn’t need to carry big amount of cash to prevent robbery or stolen case happen. Besides, credit card can also be useful during emergency. For an example, people can use credit card to make payment to avoid embarrassment happen when they realized bring not enough cash to pay bill after having lunch in five stars restaurant. Credit card unlike cash, you will not be charged for any purchases that someone else has made if you realize that your credit card has been stolen and you report it to your credit card company immediately.

However, there are some disadvantages by using credit card. The biggest disadvantage of credit card is that it’s encourage its holders to spend money that they don’t have. Most credit cards do not require you to pay off your balance immediately. Even if you only have $200, you may be able to spend more than $200 on your credit card. This may look like ‘free money’ at the time and you still have to pay it off. The longer you delay the payment, the more money you will owe the credit card companies since they charge you interest each month on the money you have borrowed. Besides, credit card companies charge you a large amount of interest on each balance that you do not pay off at the end of each month. This is the way they make their money and this is how most people in United States get into bankruptcy.

Credit cards can make life easier, but they can become a huge financial burden if credit card holders aren’t used wisely. If you do decide to use credit card, remember these simple terms:

• Keep track of all your purchases.
• Do not spend out of your budget.
• Pay off your balance on all of your credit cards punctually.
• Do not provide your credit card information to anyone but reliable companies.