While getting a new credit card might seem tempting, most people end up ignoring the dark side of having multiple credit cards. Having an additional avenue to avail credit means that the possibility of incurring additional debt also increases. This is something that you should be extremely mindful of as it can completely skew your finances.
In this blog, experts from America Debt Resolutions discuss some of the questions you should ask yourself before getting another plastic card. Asking yourself these questions will help you to assess your current financial health and also to know whether you are ready for another credit card:
- Am I able to comfortably manage present credit card debts?
If you are simply making monthly minimum payments on your credit cards or are missing a few, then getting another one would be a bad idea. How you manage your present pieces of plastic will help you to know whether or not you are ready to bear the responsibility of an additional credit card.
You probably need a debt management consultant and not another credit card if you are struggling to pay off your debts and have your expenses and savings in a mess. Such consultants will reevaluate your financial situation, and suggest a course of action that will help to get you back on track, budget better, and drive down extra spending.
- How will I use the brand new credit card?
While having multiple credit cards might boost your credit score gradually (provided you manage them well and pay your bills on time), acknowledge that keeping a track of your expenses becomes more difficult in such a scenario. That is why you need to have concrete reasons to add one more to the mix.
Do you want one for offers on frequent air travel? Are you looking for a card to use during emergencies? These are good enough reasons but one needs to be cautious and more responsible. For instance, if your other cards have maxed out and you are aching to buy the latest PlayStation in the market, then reaching out for a new credit card might not be in your best interests. Instead, it is important that you get in touch with professionals offering debt management services to deal with the case of your maxed-out credit cards.
- Have I considered the annual fees and interest rates?
While most credit card companies waive off annual fees to entice more people to get their cards, there are some that still charge a lot every year. You could incur a lot of debt just because of this.
Moreover, you could be buried under debt if you fail to make payments on time simply because the interest rates are too high. So, take your time and assess your financial health before getting yourself another credit card. Ask relevant questions such as these to the credit card companies so that you are not taken advantage of later on.
There is no doubt that credit cards make our lives easier, especially when we are short of cash. Moreover, their flexibility and the attractive offers make them even more convenient and attractive, lulling you into thinking that you’d be a fool not to have one for daily use. But be careful. Remember to ask yourself these questions before you take the plunge.