Credit cards

You’ve probably been told it might be a good idea to have at least one credit card. But why?

Here are a few reasons you may want to consider applying for a credit card if you’re over 18 and don’t already have one:

  • Having a credit card helps you build credit and establish a payment history.
  • Building up a longer credit history can naturally help your credit score over time, provided you are using credit responsibly by making payments on time and keeping your credit utilization ratio low (not letting your balance exceed 30% of your available credit).
  • A credit card may come in handy if there is an emergency and you’re not able to get to an ATM for cash or if you’re making a purchase that requires you to use a credit card for payment.

Before you apply for a card, pay attention to the APR (annual percentage rate). Some cards may offer a lower – or even 0% – introductory APR on purchases or balance transfers; be sure to read the fine print to find out how long the promotional rate lasts and what your rate will be once the promotional rate expires.

Other factors to consider in choosing a credit card might include whether it has an annual fee, what your anticipated credit line would be, whether the card offers a rewards programs (cash back, rewards points, airline miles, etc.), whether the card comes with additional perks (warranties, insurance, concierge services, offers and discounts, etc.), what kind of fraud liability protection is offered, and the reputation of the card issuer. And if you travel internationally, you may be concerned about whether a particular card charges international transaction fees.

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