How to choose a credit card
The mission of choosing the ideal credit card for you is almost as complicated as it is important. If one sat down to carefully analyze the 176 credit card options that exist in Mexico, one would not reach life for anything else. Well chosen, a card can become an important ally of your personal finances. However, a wrong decision can cause you to end up drowned in debt or even with a bad rating in the Credit Bureau.
Escape from credit cards is also not a good option, because if you do not have one, you do not generate credit history, which means that if at any time you need a loan to pay for a car, house or for an emergency, most of the Banks will close the doors and you will see yourself at the mercy of institutions “ducky” or that charge very high interest. Having a credit card helps you have a good credit history, which serves to give confidence to banks, institutions or even future employers about your compliance.
The most important question you should ask yourself when choosing a credit card is how and for what will I use the card? It is what defines what factors you should take into account for your decision. Here are some options
1. As payment method
If you plan to use your credit card as a daily payment method and prefer to pay the bank 100% of the debt before the deadline, then you are what is known as “totalero”. If so – and only if so -, the interest rate due is not so important to you. Instead, you should take into account figures such as the annuity for having your plastic or the special benefits of each card. However, do not let your guard down when using it, pay attention to the fees charged by banks for some operations, such as cash withdrawals at ATMs.
2. As an extension of your salary
A very common use of credit cards is to “pay in advance” and then settle the debt with the bank. If you plan to use it to buy items that you know you cannot pay quickly, then you should be careful that the card you choose has a low interest rate. In addition to the greater interest your debt is increasing, if you delay with the minimum payments the bank will charge you a late payment fee and this is how the first step is taken to have a bad rating in the Credit Bureau. Here the important thing is to choose well and know how to measure yourself when using it.
3. For special occasions
Now that if you plan to use the card sporadically, only for emergencies or seasonal purchases, the interest is important but also pay attention to having a low annual fee.
Some banks offer you free for the first year and then charge fees annually, so watch that out. Also check that you are not being charged benefits or insurance that you do not use, as not all are free and it is useless to pay for something you will never use.
Other factors to take into account are your income, expenses, the time you take with your current job, if you have current credits or a previous credit history, as this will depend on whether the bank approves your application or not.
As you will see, it is a decision that must be carefully considered. It is not advisable to keep a card just because it was offered by a bank executive, or go for the one with the lowest CAT or the greatest benefits if it is not what suits you best. A hasty decision can cost you a lot of money in the future and negatively impact your credit history.
If you are looking for a loan with a fair interest rate. You have reached the right place.