If you’re reading this, you’re probably in the market for a credit card. But before you apply, you need to know a few things. Credit cards aren’t just for people who have excellent credit. Even if that’s true, you might still qualify for a card with a low credit limit. But it’s not enough to be able to apply for a card. You need to understand the risks involved, too. Here’s what you need to know before you apply for credit cards.
You Have to be Approved
This is a no-brainer, but many people don’t realize that you have to be approved for a credit card before you can apply for one. It doesn’t matter how much money you have in the bank, how excellent your credit is, or how much you want a credit card, and it won’t do you any good if the card company never gives you the okay.
You Need Good Credit
Even if you’re approved for a credit card, you might still have difficulty getting approved for a loan if the credit card company has terrible information about you. That includes your debt to income ratio, the amount of debt you have, and how long you’ve been trying to pay it off.
You Have to be Eligible
Many people don’t realize this, but you have to be eligible for a credit card to apply for one. It doesn’t matter if you have a job, a good income, or excellent credit. If the card company doesn’t think you’re a good fit for a credit card, they will probably not approve your application.
You Need to Be Willing to Pay Back the Credit Card Debt
One of the most important things you have to remember is that you need to be willing to pay back the credit card debt, even if you can only pay it off a little bit each month. This is the riskiest part of applying for a credit card in Singapore. If the card company turns you down, there’s a good chance you’ll default on your debt and eventually have to settle it in bankruptcy.
You Need to Realize the Risks Involved
The thing that puts people off the most when applying for credit cards is realizing the risks involved. If you don’t fully understand those risks, it’s easy to assume that applying for a credit card is harmless and risk-free. But it’s not. If you don’t pay your credit card bills on time, or if you miss payments here and there, your credit score will take a hit. Eventually, it might be enough for the credit card company to give your account to a collection agency.
Summing it up
Credit cards are a great thing. They can help you build or rebuild your credit, and they’re perfect for people with good credit who want an opportunity to use it. But before you apply, you need to be aware of the risks involved. Make sure you fully understand what it takes to be approved for a credit card and the impact that it will have on your credit score. Once you’ve gotten that squared away, make sure you’re willing to pay back the credit card debt, even if only a little bit each month. And finally, realize that credit cards are not free and that you need to pay for them.
