Credit 101: What Credit Card Should I Get?

If you want life to be more affordable, you should improve your credit score. Doing so can save you money on things such as rent, utilities, and even cell phone plans.

Of course, you need a credit card to improve your credit score. Which leaves you with a couple of questions:

What credit card should I get? Which credit card is best for me?

The answer isn’t as clear-cut as you’d think…

Why Should I Get a Credit Card?

Before you select a credit card, you should understand why you need that card. Doing so will ensure that you choose the one that best suits your needs.

So why should you get a credit card?

Simply put, opening a new line of credit is a fantastic way to build up your credit. If you’re a responsible credit card owner, you’ll set yourself up for financial success in the future.

You’ll more easily obtain home loans. Your interest rates on your loans and future credit cards won’t be sky high. In fact, lenders will practically beg you to take their money.

What Kind of Credit Card Should I Get?

Now that you know why you should get a credit card, let’s start thinking about what kind of credit card you should get. There are several types of credit cards you can choose from.

Some of those types include:

  • Standard credit cards offered through banks
  • Store credit cards
  • Rewards credit cards

Standard credit cards are fairly straightforward. Their terms are often simple, and the interest rates attached to them are typical. They’re a safe bet for most beginners.

Store credit cards are also nice options for beginners who want to easily build credit. But sometimes there’s nothing simple about their terms.

In many cases, you’ll only be able to use these cards at specific stores. Further still, the deferred interest rates can be misleading, especially if you’re new to credit cards.

Rewards credit cards are yet another option. These cards offer rewards (often in the form of points) each time you use them to make a purchase. You can redeem these points for discounted flights, clothing, and other services or goods.

But don’t choose a rewards credit card just because you think you’ll get a bunch of perks. Some people fall into this trap and seldom use their rewards credit cards.

How Should I Use a Credit Card Once I Get One?

How you use your credit card is just as important as which credit card you choose. Fortunately, there’s aren’t many rules to being a responsible credit card owner.

The most important rule?

Don’t rack up too much credit card debt. There has been a 6% year-on-year increase in credit cards that were more than three months in arrears in South Africa. Carrying balances for long periods of time and missing payments negatively impact your credit score.

And if your credit score falls, you’re much less likely to secure the loans you’ll need in the future.

So What Credit Card Should I Get?

“So…what credit card should I get?” If you’re still wondering what the answer to that question is, well…

It depends. Because the truth is that there is no one-size-fits-all credit card. The different interest rates and rewards don’t all suit your lifestyle and needs.

So choose carefully.

And if you’re specifically trying to build up your credit at the moment to take out a loan? Contact us today to find out how to secure a loan for yourself.