When you apply for a credit card there are a number of other things you may want to think about before taking the plunge. The first is pretty simple: Can you afford it? Do you know you’ll be able to pay at least the minimum monthly payment on time every month?
Here are a few more things to think about before starting your credit card application:
You’ll see Annual Percentage Rate or APR popping up a lot. This refers to the average annual cost of using that specific credit card, compared to what you’ll spend on that card over the same period. In other words, it’s the amount most cardholders pay to use the card over a year and it includes interest payments and fees. The APR of a credit card is a good way to compare a card with its competitors.
The APR that most providers advertise is the one that’s offered to the majority of their customers, but not all of them. So when you apply for a credit card you could find that you’re offered a different APR to the one you were after. But we’re different to most credit card providers. The APR you see when you apply for a Capital One credit card is always the APR you’ll get.
Find out more about APR with our Credit Knowledge.
Fees and charges
All credit cards will charge you a fee if you are late with a payment, miss a payment or go over your credit limit. But you could also be charged fees for making cash-like transactions. For example, if you take out cash from a cash machine or buy foreign currency. To avoid these fees, you may want to think about using a debit card instead or getting a credit card designed for travelling abroad.
Credit card providers will only offer you a credit limit they think you’ll be able to manage, based on the information in your credit file. This is so you don’t end up borrowing more than you can afford to pay back. You may want to think about your other options if you aren’t offered the credit limit you’re after.
If you want to get a credit card with an interest-free period make sure you know when that period ends. You could face high interest charges if you don’t pay off your balance in time.