For some people, a credit card is a convenient method to pay for things they wouldn’t normally be able to afford. Others, though, see it as a tool employed by banks to hold us in debt for the rest of our lives. In fact, it might be any of these things, for that the user is the ultimate decider. How you deal with your credit card puts it to good use or to your detriment.

If you are thinking whether or not to have a credit card, we recommend that you consider the following aspects.

1. Understand your needs.

It’s critical to understand the purpose of having a credit card before applying for one. The most obvious purpose is to provide you with simplicity of payment. Besides, you might need an additional credit line if necessary. In fact, you can choose a card depending on the benefits and rewards it offers.

You need to think about your plans regarding your credit card. If it is only for the sake of an unnecessary purchase, you might want to think twice. Since if you’re only motivated by pleasure and relaxation, it won’t be long before you rack up a debt you can’t pay back.

2. Check and confirm your qualifications.

Take note that there are a few qualifications to own a credit card. For instance, Bank Negara has restrictions that limit the number of credit cards you can have if you earn less than RM36,000 per year. However, banks have increased the minimum annual wage criterion to RM24,000 per year. Moreover, you may not qualify if your credit score is poor or if you’ve been a bad payer in the past.

Hence, it is vital to make a list of your monthly expenses to help you figure out how much you can spend each month. Also, make sure you can afford to pay off a credit card account such as a mortgage, PTPTN loan and so on. This is because the banks will compute this before approving your card and credit limit.

3. Choose the correct type of card.

Credit cards come in a plethora of shapes and sizes. However, understanding your lifestyle and spending habits will assist you in selecting the finest option for you to gain the most benefits. For people who enjoy collecting points and receiving appealing presents, rebates, travel miles, and shopping vouchers, reward cards are very suitable. If you’re a cash person, you might prefer a traditional cashback card.

Furthermore, if you only use your credit card for emergencies, a card that is free for life should be considered. Swipe cards which forgo annual fees aren’t always the greatest idea for all cases. Look for a card which suits your state the most.

4. Plan ahead if you want extra credit cards.

It is usual if you consider acquiring a second credit card. Many people plan to keep one for emergencies and the other for everyday use. However, with two credit cards at your disposal, it is often tough to avoid overspending. Therefore, make sure you put more attention on what you spend.

Also, make sure they’re both without yearly fees, as having two cards will raise the cost. Having two cards means you’ll have to be more cautious while making your selection. You want the two that can complement each other and provide you with better advantages.

5. Take note of the extra charges.

On your overall bill, you will notice more than just the amount you spent. There are a variety of different fees to consider, including interest, late fees, and annual fees. You can choose a card with no annual fee, but interest and other costs will still apply. These fees can accumulate over time, so avoid using your cards for things you don’t need or the ones with a recurring balance.

Conclusion

After deciding on the goal of having a credit card in question one, it’s time to conduct research to meet this demand. Alternatively, you might use our card comparator, where we’ve done all the work for you. Feel free to contact us to know more about credit card choices.

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