18 & over

Credits Card and the PANS Labyrinth

Well let’s begin “CREDIT CARDS” These two word define an entire universe of confusion, rewards, fees and whole needle stack of choices. So we will approach this systematically.

Step 1) Credit Score: before applying for any new credit card one needs to be aware of one Credit Score. Your credit score automatically either qualifies or eliminates you from credit cards.
Blindly applying for credit cards and getting rejected only harms your credit history further. Always keep an eye on minimum Credit Score requirements on various card. A tip check your current score with Credit karma which is free and does not affect your score

Step 2) Annual Income and Spending Limits: Credit card is meant to regulate both of them. One need to be aware of their cash flow cycle., If you are a person who is discipline enough to spend within your monthly checks and still have savings, then you are suitable for credit cards with higher rewards, beware these do carry higher annual fees. So make sure that the cash rewards you earn more than offset these fees. But you might be living paycheck to paycheck in that case go for lower fees or no fees card even they offer fewer perks. This is important since one late payment can wreck havoc on your monthly fees and credit score, further damaging your credit standing with other companies.

Step 3) Researching cards: Most of credit card companies card reward in many forms “Cash Backs on Groceries, Gas, Superstores”, “Bonus points” , “ Transferable Points”. Match these with spending pattern. Do you spend more on groceries, or do you drive a lot. Where do you spend more Big ticket or small ticket items. High Restaurant points do not matter if you prepare meals at home for most of it. High travel points don’t help if you have a family of 5 which makes traveling by flight exorbitant. Analyze which reward you will actually end cashing on.

Step 4) There are some generally standard industry advice you should heed on
‘Don’t apply for too many cards’
‘ Pay off balances’
‘Stay on top of any new charges’
‘Work on repairing bad credit score’

This list is Endless

One need to realise that Credit score is just a form of loan for not carrying cash. You have to pay sooner or later. If late then you pay a big penalty it’s not a free ride don’t treat it such but with due diligence you can end up with bonus rewards worth spending researching the best cards.

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