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The Do’s and Don’ts of Opening a Credit Card

Credit cards have a lot of benefits, especially if you’re about to move to a new house in Southern Maine. After all, if you plan to rent an apartment or house and don’t have much of a credit history, using a credit card responsibly can help you build it up. The same goes if you want to eventually buy a house in Southern Maine. And of course, once you move, you’ll probably want to buy furniture for your new house, in which case a credit card could come in handy. But it’s important to make sure you open the right card, and these tips can help.

Check your credit report first. You need to have an idea of your odds of being able to open a credit card. If your credit score is really low, you might need to apply for a secured credit card. If your score is just okay, you will need to stick to cards that only require a fair credit rating. This is because the more cards you apply for, the more inquiries you’ll have on your report, which can lower your score.

Find a rewards card. If you have excellent, good, or even fair credit, you should be able to find some credit cards that offer rewards. For example, some cards offer cash back for every dollar you spend using the card. Others focus on specific rewards, like travel benefits that might include money toward a car rental, airplane ticket, or hotel room when you spend a certain amount on the card. Choose the rewards card that best suits your lifestyle so you can get the most out of it.

Check reviews. There are several review sites for credit cards. When you read reviews from people who have had the cards you’re considering, you can get a sense of whether it’s worth it for you to apply. That’s also where you can find out if the lender has a reputation for making it difficult to pay off the card, taking away rewards, raising interest rates, etc.

Apply for a card with fees. You have too many options to pay for a card with an annual fee. You can likely find a great credit card that is free for you to begin using as soon as you get it.

Forget to check interest rates. You don’t want a card with a really high interest rate, because you’ll end up paying more over time for your purchases. Of course, the interest rate you can get depends on your credit. If your score is excellent, you can get a card with an interest rate of about 13% or less. If it’s poor, the best rate you get might be closer to 20%. Luckily, you can request a lower rate as your credit improves.

Overspend on your card. If you’re using a credit card to improve your credit, it’s important to keep a very low balance. Once you use the card, pay it all or at least mostly off at the end of the month. This can help ensure you don’t get in over your head with credit card debt!