Financial Blog

You probably know Oprah Winfrey, America’s well-loved TV host, actress, producer, book author, and philanthropist. Many times in The Oprah Winfrey Show, the host would help change the lives of her audience by giving away cars, vacations, and in some instances, by paying off house mortgages or credit card bills!

Read more: 5 Credit Card Myths You Need to Know

Whether or not those acts helped Oprah’s beneficiaries in the long term, it was clear that lots of people live in the bondage of debt—thanks to their credit card woes.

Having a credit card is a major financial responsibility. Maintaining one (or several) can make or break your life depending on how you use it. Before submitting your next credit card application, here are some questions you should ask yourself first.

The operative word here is “need.” Usually, the answer to this question is to either boost your spending power, to collect reward points for your purchases, or to do away with cash altogether.

For those of you who already have one, ask yourself why you need another. We recommend going back to your credit card usage history to see your spending patterns. Are your previous expenses for your wants or your needs? Have you been a responsible cardholder? Can you really handle another one?

APR stands for annual percentage rate of interest. It’s the amount that will be charged to you on top of your full balance if you don’t pay for everything on your monthly due date.

Surely, you’d want a card that has the lowest APR for obvious reasons. Some credit card providers even offer a zero APR during the first few years of your contract, but this may change after a certain period.

It’s always a good idea to scout for the best card that fits your needs. Do you regularly use your card for big ticket purchases? Or are you more of an online shopper? The competition may not just come down to the lowest fees and interest rates, but with the company’s customer service as well.

Look for reviews online to see what people are thinking about a particular credit card company. Be critical enough to separate the wheat from the chaff.

Annual fees may depend on the type of credit card you’re getting. If you’d like to take advantage of premium perks and privileges, be ready to fork out slightly higher annual fees. Some banks allow you to test out the card first by waiving the annual fee for the first year, while some don’t have annual fees altogether. Always read and reread the fine print.

Some credit cards are highly distinguished because of their rewards program—allowing you to save some cash on your purchases. Use it as a criterion to evaluate which credit card you should choose, especially if your main purpose for it is to collect points.

To sum it up, getting a credit card is a big responsibility. You’ll be dealing with fees, interest rates, charges, and due dates which can be overwhelming for a first timer, but the convenience and rewards you’ll get in return when you properly use a credit card outweighs the fears of having one.