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If you are young and just getting to grips with financial products, you may have looked into getting a credit card. Although credit cards are not an essential product for everyone, many people have at least one card, and so it pays to know about how they work. If you want to know whether or not you are ready for a credit card, then here is some advice to help you out. When to get a card? Most people think about getting their first card when they go to University. Although some avoid the temptation and others get cards earlier, generally speaking you should look at getting your first credit card from about the age of 18 onwards. When you are at University or starting out a job, you are likely to have more outgoings than you did before, and a credit card is a useful tool to cover some of these expenses. What type of card to get? If you are going to University, then you should look at getting a dedicated student credit card. These cards do not require such strict credit checks, and you can usually get a much better limit than you can with a regular card. Also, you will receive additional benefits such as discounts on books, clothes and music. If you are starting a job, then it may be harder to get that first card, although if you can prove your income you should be fine. Benefits of having a credit card Knowing whether you should get a credit card depends on whether or not the benefits are real benefits to you. One of the major benefits of having a credit card is that it is great for emergencies. If you are new to being independent, unexpected things can happen, and having a backup amount of money in the form of a credit card can really help you out of tight situations. Also, credit cards are more secure than cash or cheques, so you are less likely to lose your money or have it stolen. Another benefit of having a credit card is that it can help you to build a credit history. If you use your credit card responsibly then you will show lenders you are safe, and this will help you to secure important financial products later in life such as loans and mortgages. Problems with credit cards Before you decide whether to get a credit card or not, you should know the problems that can occur. Firstly, having a credit card can be dangerous in the wrong hands. You can quickly accumulate a large amount of debt, both hurting your finances now and in the future by destroying your credit rating. Also, keeping up with repayments can be hard, and having debts is generally not a good thing. Are you ready? If you think you are ready for a credit card, then make sure you know the benefits you can receive and the problems that you might have to face. You should ask yourself whether you really need the card, and if you will honestly be able to keep up with the repayments. Just because your friends have one does not mean you should get one too. However, if you believe a credit card is necessary, then make sure you shop around to find yourself the best deal, and only spend what you can realistically afford to repay. If you do this then you will get the best out of your credit card without putting yourself too far into debt.
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