Credit cards are perhaps the most widely used and accessible form of credit. A credit card allows you to borrow money from your bank to make your purchases like your morning coffee at Starbucks or paying for major repairs on your vehicle.
Go to your credit union or bank and ask for the cards they offer. Compare at least three cards by reading the fine print. Things to compare include: Annual Percentage Rate, annual fees, and any benefits that come with the card (cash back, airline points, etc.).
Use your credit card for items already in your budget. A $5,000 credit limit on your credit card is not $5,000 in additional income. It is only a different way to spend money you already have. Before you start using your credit card, you will want to make sure that you are able to pay off the balance on the items you plan to purchase. We recommend using your credit card to pay for gas for your car, or your other regular transportation expenses.
Before getting a credit card, commit to fully understand the fees and penalties associated with many credit cards. They include the following:
As you are shopping for a credit card, beware of the following: