An OFW’s Guide on Getting Your First Credit Card

Do you have a credit card? If yes, then you should still read this. If you don’t have one, then you have more reason to read this.

Getting a credit card can serve you a lot of purpose. You can buy things, especially pasalubong for your family back home (just make sure it is Visa or Mastercard) when you forgot to bring your cash. You can also rely on your card in case of emergency and when cash is not available at that time. More importantly, owning a credit allows you to build your credit score, which plays a crucial role when you apply for a loan.

So, should you apply now?

Don’t get too excited. There are things you need to remember when getting your first credit card:

On Choosing a Credit Card

Choosing a credit card is somehow similar to choosing what toy to buy for your child, the family car, or your dream home – you need to think hard and explore your options. Each credit card offers something that might not be available with the others, which is why you need to look into it closely.

Below are some of the things you need to consider:

  • Eligibility – This refers to the minimum requirements you have to fulfill when applying for a credit card.
  • Interest Rate – Also known as finance charge, the interest rate charged by credit card companies are high. Still, this will only apply if you have a balance from the previous month.
  • Annual Fee – This may be charged once a year, but it is something you can never get from. The first year is usually waived by credit card companies.
  • Penalty Fee – Aside from interest, you will also be charged with penalty fee in case of late payment and no minimum fee was paid OR you went beyond your credit limit.
  • Rewards Program – Every cent spent using your credit card must amount to something. The credit card company’s Rewards Program  should give you waiver for annual fee, air miles, gift certificates, items that correspond to the points earned, or cash back rebates.

As much as possible, go for a credit card that offers low interest rate, penalty fee, and annual fee. Good rewards program is also worth considering.

How to Apply for Your First Credit Card

  • Submit a completed application form to your chosen credit card company. You can get it directly from them or download an application form online. Make sure that all information is true and complete.
  • Prepare at least two government-issued IDs and proof of income like payslip, Income Tax Return, or Certificate of Employment. These supporting documents will help the credit card company verify your identity and determine your capacity to pay.

Tips to Remember when Using Your First Credit Card

Congratulations. You finally have your first credit card. Still, don’t get too excited. There are certain rules you need to follow to make sure that you won’t get in debt. After all, credit card is one of the reasons why people, not just OFWs are in debt.

Nonetheless, here’s what you need to remember:

  • Sign the back of the card as soon as you got it. This way, you will be able to prevent unauthorized credit card usage.
  • Activate your card. Some card were pre-activated, nevertheless, it is best to activate it using the number provided in your welcoming kit.
  • Do not share your credit card details to anyone to avoid credit card fraud.
  • Pay your credit card balance on time and in full amount. Any remaining balance from previous month will be carried over the next month and included in the computation of interest.
  • Set a budget for your credit card usage. Using your entire credit limit is a red flag for lenders, plus it would be harder to pay for it, causing you to accumulate debt.

Are you ready to apply for your first credit card?

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