The questions you ask before getting a credit card have a major effect on how successful your financial strategy becomes. Are the credit card yearly fees worth it? Where will you use the card? What is the value of having a card?

First, what is the value of a credit card? If you lost your card or if it was stolen, your losses can run into thousands to millions of dollars especially if it was used by an identity thief. But, when it comes to the value of the plastic card itself, credit card companies can charge a certain amount for the card replacement. Others replace it for free.

Second, why would you use a credit card? Credit cards actually make sense, if you use it wisely. It can establish and improve your credit record especially if you pay on time; you can get discounts from stores, and it gives you instant money during emergency. There are also rewards; it comes with merchant protection guarantee and insurance on items you purchased with your credit card.

Third, are the credit card yearly fees worth it? This question is applicable to those who want to use credit cards as a tool in rebuilding their credit.

The importance of time-frame matching when getting a credit card
Too often, borrower’s sign up for credit cards without considering the period in which they plan to use the card. For example, let’s say you signed up for a credit card with $1,000 credit limit. You have 12 months in a year to consume it. When are you planning to use it? When will you stop?

Some people use their credit card for everyday purchase while others use it as an emergency fund. Be very clear about the purpose in using a particular card to avoid paying more than what you originally intended when you took the card.

People often take credit cards for long-term use and max out the limits for short-term goals. The problem with this attitude is that it increases your risk of borrowing more than what is necessary. Of course, one or two cash advances or big purchases may happen once in a while but if you do this long enough, you may end up broke. Match your credit cards with a time limit. You’ll be much more comfortable with your finances if you do.

Can I afford to keep this credit card?
Do you have a long-term income to repay your credit card debt? Too often, people take out cards, max them out, fail to pay them off and end up with a bad credit. The way to avoid this situation is to think about your capacity to repay your credit card debt-even with unforeseen financial emergencies, before you get a credit card. Think about the credit card yearly fees, why you would use it, and its overall value.

Credit card consolidation
If you have multiple credit card debts and you want to get rid of them, but your income is not enough to pay them all at once, why not try Australian Lending Centre’s credit card debt consolidation? With a single loan, you can repay all of your debts. You no longer have to worry about the different credit card yearly fees, rates and limits.

Apply now!