Questions to Ask Yourself Before You Apply for That First Credit Card
By Khadejah Stegall
Khadejah is a part of the TLC College Ambassador Program and attends North Carolina A&T University.
This article originally appeared on ESSENCE.com for a back-to-college content partnership with TLC.
Are you thinking about applying for that first credit card? Before you make the decision, it’s essential to do your research on credit cards so you won’t swipe away and get into credit card debt. Credit often has a bad stigma to it because many assume if one has credit, he or she is in overwhelming debt, but with self-control and money management, credit cards can be useful.
First, let’s talk about what a credit card is. A credit card is a convenient substitute for cash and allows you to spend money on credit up to an agreed limit. Each month, you will receive a statement of a minimum balance to pay. If the balance is not paid in full, you will typically be charged interest until it is cleared. Banks usually target college students to get their first credit card to start to build their credit, but many students aren’t fully educated about credit and may abuse the use. Here are some questions to ask yourself before you apply for your first one.
Do I Need A Credit Card?
A good place to start when you are thinking about a credit card. Does a credit card suit your current lifestyle? Even if you find a credit card that works for you, you need to be approved. The ideal person to apply for a credit card is someone that has income so he or she can pay the balance every month. If you are a college student that works and looking to apply for a credit card to build your credit and for emergencies, then it may make sense for you to get one. Keep in mind that you need to decipher what a true emergency is. An outfit for an event is not an emergency, but your car breaking down is an emergency. If you are a student without a job and want extra money to splurge, it may not be a good time to get a credit card now.
Which Card Is Best For Me?
When choosing a card, consider the APR, which is the annual percentage rate. There may be yearly fees involved in using some credit cards, so consider all of the costs. Check out a chart with different cards to determine if you need to apply for a card with a lower interest rate. There are some cards with 0% APR for the first year. If you plan to pay off the balance every month, then this may not be a huge deal for you, but interest can add up!
Am I Disciplined Enough?
This is a time to be very honest with yourself because if you lose control with your credit card, it could hurt you in the future if you try to buy a car or any other purchases where your credit has to be looked up. Discuss this topic with your parents or an experienced person that you trust who has credit cards. An option for you to control your spending is to get a credit card with a low credit limit, such as $300. This is a large amount, but not too much to where it will take you years to pay back. The better you manage your credit, the higher your limit will go up.
How Can I Benefit From This?
You can benefit from a credit card by establishing your first line of credit. A good credit card to consider building your credit is a gas station credit card. You can only use the credit card for gas, and it’s something that you need anyway. Pay the balance right back at the end of the month to avoid interest.
There are also other perks to take advantage of such as rental insurance, warranty protection and many others. It’s important to do your research to see what useful perks benefit your lifestyle the most.
Applying for a credit card is a big decision, but if you ask yourself a few questions, you can determine if you really need one. Credit card debt is real, and if you have student loans, you don’t want to pile on more debt for yourself later.
Khadejah Stegall is a college mommy blogger that inspires others to achieve the impossible through the power of Jesus. She enjoys family time, eating vegan meals when it's convenient and mentoring others on professional development. To be inspired by more post, follow her blog at khadejahstegall.com