Give Yourself Some Credit - 5 Tips to Know Before Applying for a Credit Card

If you’re like me, you love going on adventures! However, most of the time, those things aren’t 100% free. Even small expenses like parking fees and coffee can add up after a while.

And think about things like going to grad school - a Harvard MBA rings up at a whopping 144k and Columbia Law at a jaw-dropping 219k. Unless you’re a RobinHood stock trading savant or have a hefty trust-fund at your disposal, you can’t afford those on your own. 

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This is where our friends the credit card companies enter. I opened a credit card last August to show those who held my professional future in their hands that I could be trusted to pay back loans when the time comes.

I didn’t exactly achieve that goal when I was looking at a maxed out credit card two months later. I didn’t realize your score was impacted by so many variables- frequency with which you use the card, percentage of limit used, how many cards are open, your late payments - the list goes on.

To make sure you don’t make the same mistakes I did, I’ve compiled a few things you need to know before you get start applying for credit cards:

1.Before opening any credit card, open a CreditKarma account.

It’s free and shows you if anyone has an account open in your name, the different card options at your disposal and your approval odds. 

2.Know what you want in terms of rewards.

Do you drive a lot? You may want gas rewards. Do you travel a lot? You may want airline miles for your upcoming trek home for Thanksgiving. LendEdu has a super helpful resource that outlines rewards programs for some of the top cards.

3.Know your interest rate and monthly payment!

For example, my Discover Card has a 0% intro APR for 6 months, and then 15.24%-24.24% interest rate after the grace period. APR is adjusted based on credit score. My Capital One Venture Card however, is the same 0% intro for 12 months, the same interest rate range, but it’s limit is $2,000 instead of $500 and it builds airline miles! 

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4.Always try to pay your balance in full.

Seeing as though I haven’t had the Discover for 6 months, I didn’t have any interest at the time, but if I maxed out my card again, I would start to accrue interest. Sometimes it is not possible, but even paying more than the minimum can help.

5.Don’t apply for too many, too quickly.

Just because one card is used, does not mean you should open another and if you do, a hard inquiry by the credit card company will most likely bring your score down.

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Destigmatizing the discussion around income is so important! Remember - your worth is not based on a number. Push yourself to achieve financial responsibility, but don’t feel the need to make yourself miserable by skimping out on everything! Pay your bills, buy the (small) coffee, skip the lunch and go see that movie. You can achieve balance without feeling restricted.