What to look for when getting a credit card

A happy woman using her credit card online

When it comes to choosing and applying for a credit card, there are numerous factors you need to think about and consider before making your decision.

It’s important to be aware of the pros and cons of having a credit card, and if it’s your first time applying for one, or you’ve had a refused application previously, then it’s a good idea to compare credit cards and different providers to see which one will be best suited to you and your needs.

If you still need help deciding what kind of credit card to get, or you want to know more about how to choose the right one for you, especially if you’ve suffered from credit card debt in the past, check out our guide below.

What should you look for when getting a credit card?

With quite literally hundreds of credit cards to choose from, it’s safe to say that it can often be an overwhelming decision to know which one is the best for you and your financial needs.

Below, we’ve put together a brief checklist of the things you should consider when getting a credit card.

APR

APR, also known as Annual Percentage Rate, is how much it costs to borrow money on the card if you don’t pay off the entire balance at the end of each month.

By comparing the APR on different credit cards, you can usually see which one is the cheapest, but it’s important to consider other factors as well.

Remember, if you see a deal with a certain APR, it doesn't necessarily mean that you'll end up with this - it will largely depend on your creditworthiness and eligibility. For example, if you have a low credit score, you are likely to be faced with a higher APR.

Minimum repayment

Even if you don’t pay off the full balance each month, you will usually be required to pay off a minimum amount which is either 3% of the amount borrowed or £5, whichever is higher.

Annual fee

As well as the APR, some credit cards also charge an annual fee in order to use the card. The amount is usually added to the amount of money borrowed and you will be expected to pay it off with the amount due, and if you don’t pay the balance in full, interest will be added.

Introductory offer of an interest-free period

When thinking about getting a credit card, it’s worth seeing if the provider offers an introductory interest-free period offer. This kind of offer means that you’ll pay no or very little interest on your repayments for a set initial period of time.

Remember that once this offer ends, however, that you’ll have to pay the regular rate of interest, so it’s worth checking what that is before you sign up for an interest-free introductory offer.

Read more: 0% credit cards explained

Interest rates

Speaking of interest rates, this is another consideration you’ll have to factor in when making your decision about which credit card to get. The rate of interest that you’ll have to pay back alongside the money that you borrowed will vary depending on the credit card provider.

Similar to the APR, you may not receive the interest rate advertised on the deal you find online.

Cashback offers

A credit card that offers cashback rewards is another type of credit card that you might want to consider. This kind of offer can sometimes coincide with other offers such as loyalty points, but it’s important to not choose a credit card just because you might get some cashback for spending on it; make sure you consider other factors as well. 

Learn more: All you need to know about reward credit cards

Charges/fees

As well as all the above, many credit cards also come with their own charges and fees such as being charged for going over your credit limit or for using your card abroad.

Think about the credit card purpose

There are so many uses and purposes of having a credit card, including things like making an online purchase, to pay for holidays or to spread out the cost of a purchase over a longer period of time by paying off the monthly balance.

What to avoid when applying for a credit card

When applying for a credit card, you want to do as much as possible to increase your chances of being accepted for the card that you want, therefore it’s important to think about some of the things that you should avoid as well as what to look out for when applying for a credit card.

  • Avoid letting your credit score slip; endeavour to keep it as good as possible before applying for a credit card.
  • Don’t apply for too many lines of credit in a short period of time; this can negatively affect your credit score.
  • Try to never miss a payment.
  • Don’t forget to check your own credit report to see if there are any errors that may prevent you from being accepted for a credit card. 
  • What is the best type of credit card for everyday use?

If you’re wondering “how to choose the right credit card for me?”, then you’ll first and foremost need to think about the purpose/use of your credit card.

If you’re looking for an everyday use credit card then you might want to consider one like the American Express Platinum Everyday credit card. Whereas if you want one that has a low-interest rate, then the Natwest Credit Card or Halifax Credit Card might be better suited to you.

Find out what can affect your credit score or if you're not sure what your score currently is, check it here:

Check Your Score

What information do you need to apply for a credit card?

When applying for a credit card, you will have to provide the following to the credit card lender:

  • Your name
  • Address
  • Date of birth
  • Employment status/salary details
  • Nationality

Some providers may also ask for additional information such as identification documents like your passport, driving licence, a bank statement or a utility bill.

If you’ve applied for credit cards before

If you’re applying for too many credit cards or if you make a regular habit of switching credit cards, you may find that your credit rating will be affected which can make it much more difficult for you to be accepted for other lines of credit in the future.

Where possible, it’s best to avoid applying for too many credit cards in a short space of time.

More more tips, advice and information, read our handy guides below.

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