How many times do you wish you could win the lottery? Your chances of winning the lottery may be slim, but having good credit is easily within your reach.

Somewhere along the road, credit cards have become associated as a debt-wreaking monster. But, anything can have harmful effects if you rush into a choice. Learning about credit cards is one of the most effective ways to build your credit.

Good credit matters. It helps you buy goods when you need them, invest in insurances, and have better job opportunities.

Understanding credit cards may seem like a boring or time-consuming task. Save your time and save your credit score. Here are 5 things you should know before applying for a credit card.

Here’s What You Need to Know About Credit Cards

A credit card you can be used to buy something on a short-term loan. This can be as simple as being able to put gas in your car before your paycheck hits.

Avoid headaches like daily stress, debt consolidation, and bankruptcy. Credit cards can be your saving grace if you know how they work and how to pick the right card.

1. Benefits of Having a Credit Card

Different credit cards offer various benefits. Some include available protections, extended warranties, cash back, travel benefits, and shopping rewards. Picking one card over another based on benefits can motivate you to spend wisely using your card.

2. Different Types of Cards

You should find the card that suits your needs.

There are credit cards for general purpose and cards that can only be used at the store that issued the card. There are also cards just for students and paying off your mortgage. You can get an unsecured card which is based on your prior credit history or a secured card backed by your own funds.

3. Get Interested in Your Interest Rates

Not all cards are created equal. Credit card interest rates can be as low as 0 percent and as high as 30 percent. You gain interest based on your average daily balance throughout the month.

4. How Credit Cards Impact Your Credit Score

Your credit score affects a lot more than your ability to borrow money. If your credit score is low, potential bosses and spouses may see you as a risk they are not willing to take.

A few things determine how your credit score is calculated:

  • your payment history
  • the percent of credit you’re using at any given time
  • the age of your oldest and newest credit card
  • types of credit card accounts you’re using
  • applying for new credit cards

The best way to keep your credit score high is to pay your payments on time every time. Additionally, you should aim to have your debt balance at least 30% below your total limit. 

5. Credit Card Fees

The truth is some credit cards have various fees. Some charge late fees, annual fees, over-the-limit fees, and foreign transaction fees.

You can avoid many of these by doing your research and finding the appropriate credit card. You can read more about each credit card to compare them.

Good Credit is in Your Future

These are the top tips to know about credit cards. If you understand how credit cards work and select the right card, you will see rewards.
With good credit, the world will spill over with opportunities. You can find more answers to financial questions in our blog and put your credit to good use.