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Credit cards. What, why, when and how do I get one?


What is a credit card?


In the 1950s the Diners club in the United States started issuing credit cards as a way to pay restaurant bills. It was invented by the Diners club founder Frank Namara and since then the credit card trend grew and today you can avail it in banks, restaurants, supermarkets, and many more.

Before you get a credit card you should first know how it works. Credit cards give people access to a credit card limit that works like a loan. You are able to spend the credit until it reaches its credit limit. Meaning, you don’t need to pay cash upfront when you order/purchase something. You can use it in supermarkets, jewelry shops, airfare, food, almost anywhere at all. But you have to pay of the amount of what you bought by the set deadline for example every end of the month. If you fail to pay the full or the minimum amount by that date/deadline you will be charged with the interest that you have agreed on.


Why do I need a credit card?

To some, living without a credit card makes sense to them. The feeling that you are not in debt is such an ease. But in our day and age, credit is a must. You get credit from banks, shops, stores almost anywhere. As I have said earlier credit cards are simply one of the most basic modes of payment when it comes to purchases, it works like cashdebit cardschecks, etc.. Having to get a hold of a credit card and spending it builds credit profile. Now, a credit profile is used by lenders to check if you are worthy of being lent to. For example, you need to buy a house and the amount is overwhelmingly big for your salary to cover in one go, this is where you consider having a home loan. Now, when you apply for a home loan this is where credit profile comes in, the lenders can see if you have a good credit rating. Of course, when you have a good credit rating it increases your chances of acquiring a home loan compared to those who do not have a credit profile. Not only that, but it would also be more convenient for you to shop and buy things with ease.


When should I get a credit card?

Of course, like many things, it is best to own a credit card when you are still young. Acquiring a credit card early opens to a gateway of lots of things like rewards and points though this might vary among banks and financial institutions that would be a general idea. You don’t really need multiple credit cards, just one or two would do you good plus it all depends on how much you earn from your work or business. Well, it is really better to get a credit card before you even need a credit card in the first place, this way you may be able to create and update your credit profile early as having a good credit profile helps you to have a higher chance of getting a loan/service. Cause you will never know when you need a loan that is immediate.



How do I get a credit card?

There are multiple ways of having a credit card. But before you do, you should think of some things first. One of those things is to think about which bank are you going to get your credit card. Different banks offer different plans and options for credit cards. Pick what suits your lifestyle. When applying for your credit card make sure to have all of your documents ready its always best to be prepared. Banks usually call you, email you or even text you to ask for information about you and how do you earn. Lastly, you need to activate your credit card as per your bank’s instructions.

And there you have it. Great tips about having to get a credit card and what to consider when getting one. Always consider how you feel about it and if you can really maintain having a credit card. Remember, you are still going to pay what you just bought and credit cards enable you to open so many avenues with regards to your purchasing power, credit profile, and standing. 

Still need to read more about credit cards? Check out this link about the benefits of having a credit card