If you have considered taking out a credit card to build your credit. You need to make sure to use the card wisely and to pay off the bill in full every month. This will safely build your credit, and help you to avoid accumulating debt. However, not all credit cards are created equal. There are important things to consider when you are opening a credit card.
1) There is no reason to pay an annual fee for a credit card. You should be able to find a credit card available to you that will not charge you an annual fee. You likely receive multiple offers a week. You need to be picky and choosy.
2) When you are applying for a credit card it is important to read the fine print and understand the guidelines associated with the credit card. If you feel that you are responsible enough to have a credit card you are responsible enough to take the time to read and understand the fine print.
3) Pay attention to the interest rates. Many cards offer a low introductory rate, and then it jumps dramatically when the introductory period is over. Other reasons for rate hikes include late payments, exceeding your balance or because your credit risk has increased. Even if you are never planning on carrying a balance you need to understand how your card will work.
4) You need to make your payments on time every month. Hopefully you are paying off your balance in full every month. If you are trying to build your credit history and score, a late payment will undo anything that you have been attempting to accomplish.
5) You should look at the rewards offered with the card and carefully weigh which ones will benefit you the most. It depends on your personal lifestyle and needs. A frequent flier card or a cash back card are nice bonuses, but you need to make sure that the rewards offered are attainable. Often fees are associated with these cards, and you should balance the fees paid versus the rewards earned before you choose this type of card.
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