Deciding whether or not applying for credit cards is a good idea is a personal decision that only a person with a solid education about the way they impact their finances can make. Credit can buy many things, cars, homes, stereos, a first name basis relationship with the creditors, and headaches the size of Montana. Being responsible with a credit card is more than simply paying your balance, however, if you feel you’re in need of a credit card, then by all means, they can certainly make life easier.
The first credit card you may receive you’ll receive without really asking for. These days simply opening a checking account lands in your hot little hands a bank card that acts and looks exactly like a credit card, except there’s no bill at the end of the month. Convenient. Instead the money is zapped directly from your checking account, so it only looks like a credit card, and is accepted as a credit card anywhere you may need one. For many people today, this is enough credit.
If you have good credit, you will receive ample offers for credit card, typically ranging from $1000 in credit to $50,000 in credit. If you decide to apply for a credit card, they will run a credit check when they receive your application. The more credit card you apply for, the more often someone is checking on your credit. Credit checks show up on your credit report, and too many of them don’t look good when you apply for various other types of credit like an auto loan or a home loan.
The basic rule of financial thumb goes something like this, a household that makes less than $25,000 should use only checking account based credit cards. Between $25,000 and $45,000 annual income a credit limit of about $1000 to $5000 is sufficient. A household that brings in between $45,000 and $80,000 should extend their credit limit, if they wish to, up to about $10,000 to $20,000. Those with six figure incomes can afford to extend their credit limits from $50,000 and beyond.
Of course, credit card companies don’t stick to this rule of thumb. These numbers are based on what a household could reasonably pay off in a relatively short amount of time for any reason deemed necessary. One of the most difficult limits for Americans to set with themselves is their credit limit. We are perpetually offered a bit more, and so we take a bit more, knowing we can easily just stop using the credit cards if we have to.
Having one credit card can make life easier. Having six can make life Hell. The fastest way to get into credit card debt is to carry too many credit cards. Having one in your pocket means you are likely to have a basic idea of how high the balance is before you decide to whip it out for another purchase. Having too many means you are not really sure how high the balance of any of them are and you may even find yourself at the local convenience store not sure which card will take the $10 purchase you’d like to walk out with.
Every store can offer you a credit card, not to mention the big names, Visa, American Express, and MasterCard. In fact, each of the big names also has additional card. You can get the American Express Small Business card or the Visa Traveler’s card, or any other card you want. Stop. If you want more than one card, the basic household limit really should be two for anyone who makes less than $100,000 per year.
Applying for credit cards typically doesn’t require a whole lot of searching. If you have an address and a bank account, you will receive offers, sometimes daily, for a new credit card. Direct mail, telemarketing, even SPAM are simple and effective methods of finding willing credit card applicants for the credit card companies. The bank will usually offer you one if you’ve had a clean account for over a year, meaning that you haven’t bounced any checks since opening your account. Department store sales people will offer you a credit card while you are making your purchase. Applying for a credit card is as easy as filling out a piece of paper and waiting for credit approval.
Credit cards can seriously make life easier, and responsible card owners find that it makes life a little better. Without having to wait too long to purchase something that is highly desired or needed can make a huge difference in the quality of your life. Applying for credit cards is something that should be done with high regard to your financial future.
