With cash being used less and less in favor of plastic, it’s becoming even more important to own a credit card. With competition fierce between credit providers, there are now dozens of cards on the market to choose from. Each credit card is designed with a range of rates and features to appeal to a particular type of spender. It’s important to only apply for credit card that will suit you and your particular circumstances. Read on to find out what kind of spender you are, and what kind of credit card you should go for.
The occasional spender
You only use a credit card for emergencies or to shop once or twice a year in the sales. You like to have a credit card in your pocket, especially when you’re traveling abroad, where it acts as a financial cushion if you need it. However, you rigorously plan your finances and try to only spend what you have. You strive to pay off your credit card purchases within a month or two so that you don’t accumulate a balance over time. The best credit card for you is one with low or no interest rates.
You have the best of intentions, but despite this you almost always spend more than you earn in a month. You use your credit card to pay for a variety of items like restaurant bills, flights and entertainment, and you usually carry the balance forward each month. Because of this you should look for a card with a low APR with as few fees as possible. If the card offers instant discounts that’s a bonus, but make sure the discounts aren’t paid for with a big monthly fee.
The new spender
If you haven’t owned a credit card or taken out a loan before, you’ll usually have to start with credit building credit cards. These credit cards have a slightly higher annual rate of interest but they have a lower credit limit, meaning that you’ll be able to manage your spending and plan sensibly around your budget.
Whether used by students or just people with a low or irregular income, these credit cards are often the first step towards building a solid credit profile.
The everyday spender
You whip out your credit card several times a day to pay for household items like groceries and petrol. But you also pay off your bill in full at the end of each month. In this sense, you use a credit card the way many people use a debit card, probably because you like the security that paying with a credit card offers, especially when making online transactions.