What I Wish I Had Known About Credit Cards Before Signing Up

The credit card space is increasingly competitive, with new players and products emerging every day. As a result, card issuers are coming up with creative ways to attract customers, including offering lucrative sign-up bonuses and rewards programs. In many cases, the benefits of these cards can be overwhelming. Who doesn’t love free flights or hotel stays? But while these incentives might seem like an opportunity not to be missed, you need to think carefully before diving into any credit card – and understand exactly what you’re getting yourself into. Any credit card requires you to make a financial commitment upfront by paying an upfront fee (i.e., the application fee) and perhaps also a monthly subscription fee until the end of the promotional period. Once that period ends, standard variable interest rates will most likely apply on any outstanding balance. A good way to think about it is that a credit card is like renting money for a limited period of time.

What to look for when choosing a credit card

– Interest rate: Always look out for the card’s interest rate and how much you’ll need to pay in interest if you don’t pay off the full balance every month. Credit card interest rates are generally higher than those for a personal loan, for example, which can make them much harder to pay off if you don’t have a large income. If you can’t pay off your bill in full each month, you likely shouldn’t go for a card with a very high APR. 

– Annual fee: The majority of credit cards charge an annual fee, though some waive it for the first year and/or for certain card types. This fee needs to be included in your calculations when comparing credit cards, as it will affect your total cost of ownership over the long run. If you can find a card that is almost as good but with lower fees, you’d be better off with that one.

– Foreign transaction fee: This is a fee charged by some credit cards (including some of the travel rewards credit cards mentioned above) when you use the card while abroad. If you’re someone who travels a lot and uses their credit card while abroad, this is something to look out for. In many cases, you shouldn’t go for a card with a foreign transaction fee. 

– Redemption options: You need to know if the rewards you can earn with your card are in the form of points or miles, and if there are any restrictions on travel partners or redemption options. If you don’t know how you’ll redeem the rewards you’ve earned, it’s probably not worth getting a travel credit card.

The things you should NOT care about when selecting a card

– Credit card type: A number of different types of credit cards are available in the market, including charge cards (where you must pay off your full balance at the end of each month), revolving credit cards (where you can carry a balance from month to month), and cash-advance cards (which should be used as a last resort). The type of card you choose doesn’t really affect your credit score. What matters most is making sure you always pay your bill on time, every time. 

– Credit score impact: It’s true that applying for a new credit card (especially if you have no or little credit history) can have a negative effect on your credit score. However, this is usually only the case if you’re applying for a high-end rewards travel credit card and have no or little credit history. However, it’s worth noting that applying for multiple credit cards at once can have a more substantial negative impact on your credit score.

Things to consider before committing to any card

– Existing debt: If you already have a lot of debt, it’s not a good idea to take on more by applying for a new credit card. While it’s true that carrying a balance on your credit card can have a negative effect on your credit score, paying it off on time every month will actually increase your credit score over time. You don’t want to take on more debt if you can help it, but if you’ve exhausted all other options, it’s probably worth considering a travel credit card. 

– Length of the introductory period: Be sure to choose a travel credit card that has an introductory period that lasts for at least a year. In most cases, the longer the introductory period, the better. Ideally, you want to choose a card that offers a 0% introductory APR on purchases and balance transfers.

Additional features: An equally important consideration

– The annual fee: Always take note of the annual fee associated with the card. Ideally, you want to choose a card with a low annual fee (sent in the first year and waived for subsequent years). 

– Extending the introductory period: Credit card companies will sometimes offer you an opportunity to extend the promotional period if your card comes with an introductory period. If you’re interested in this, it’s best to call the company to discuss your options. 

– Credit card balance transfer: If you’re interested in lowering your overall cost of ownership with a new credit card, you can try to initiate a balance transfer by asking your card issuer to transfer the outstanding balance on your current card to a new one.


Because the credit card space is increasingly competitive, with new players and products emerging every day, you can take advantage of the situation by shopping around for the best deal. The more you know about the cards on the market, the better prepared you’ll be to make the best decision for your own circumstances. Find a card that offers a high rewards rate, a lengthy introductory period, and a low annual fee, and you’ll be set up for success in the long run.

Leave a Comment