It might be your first time to apply for credit card. For some you may not be new to it anymore, but you still need to know a few things before you start filling up another application form.

Have you ever read all the fine prints in your application form? It pays to be informed all the time, and this includes reading everything and not simply relying on what the credit card agent will tell you. So before you apply for credit card again, you might want to read on first.

People get so used to paying on credit that even if they have cash on hand, they still prefer to swipe their cards. So does one really need to apply for a card? The first thing you should know is that if you do not pay your bills in full, the balance carried over for the next month incurs interest. If you keep on paying the minimum required amount only, you will soon find it hard to catch up with interest. In the end, only the credit card company will profit while you drown deeper in debt each month.

Credit card companies increase interest rates from time to time. At first, they will offer a very low introductory rate that will make you apply for credit card instantly. But after a few months, you will soon notice that the interest rates increase. It will increase your monthly bills if you will keep on forestalling full payment.

Interest on unpaid balances is compounded. This means that if you do not pay in full, your balance for the next month will be the unpaid balance plus interest. If you still do not pay in full by next month, the sum of unpaid balance plus interest will further incur interest. This goes on until you will soon find it difficult to catch up because the interest base gets bigger and bigger. Sometimes it is no wonder that your debt balloons to more than 100% of your original credit purchase if you continue paying only the minimum amount due.

Credit cards can make or break you. If you depend too much on credit spending, it might leave you paying your debts for the next few years. If you have cash, it is advisable to just pay in full rather than pay on installment. And if you have to pay on installment, try to finish your dues the soonest time you can. Pay more than the minimum due if you have the means. And be careful when you apply for credit card because you might not really need another one.

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