Why Get a New Credit Card?
I’ll probably go into greater detail about my own financial understandings and mishaps at a later date. However, back in November I got a second credit card, and I feel like I have a little explaining to do as of why. Why would I subject myself to this? Marriage.
In May of 2018 I proposed to my girlfriend and we became affianced. With that comes planning a wedding. With planning a wedding comes deposits and buying a ton of things. Our date is basically one year from when I proposed. Seeing as we had little time to actually save, I decided credit (along with generous donations from family) would be the best option for us to pay for things.
Now, marriage may be the short answer to the questions, but the longer answer involves things like building credit and being able to afford certain things in a reasonable amount of time. You see, I already have one credit card (you probably gathered that from the title of this blog post) but that card’s “interest free” time limit has run out.
Deciding What Kind of Credit Card
Like any sane millennial, I’m trying to desperately dodge as many fees as possible. So when my bank kept suggesting that I was “pre-approved” for a new credit card, I gave it ton of thought and then I applied.
The card they suggested was a low interest rate card with no real other benefits. While this didn’t seem too appealing at first, I re-evaluated my financial situation and thought patterns.
If I got a card with benefits like 5% cash back on special purchases or 3% cash back at restaurants or 4% back on sky miles, I’d be more tempted to spend money on these things just to earn the cash back. By selecting a card with no benefits other than the fact that it has a low interest rate, I win.
Another reason I was able to avoid the trap of getting a card with special benefits is I changed my checking account to one that earns cash back. A little digging on my bank’s website and I discovered a checking account that earns cash back every time I make a purchase.
As someone who doesn’t carry cash often, or at all, I decided to give this account a try. After 3 successful months in this account, I couldn’t be happier. I don’t earn a ton, but earning money by spending my own money is a win in my book.
Deciding to Get the New Credit Card
I only spend money on the new credit card when I need to (for things for the wedding) and I don’t have to worry about some crazy 22% interest rate biting me in the butt.
Some may ask why I didn’t just opt for a loan instead. The simple answer is, this new card has 0% interest until 2020. I have more than a year to pay back whatever I spend without worrying about interest. Seeing as I haven’t even needed to buy anything yet makes me feel a lot better.
If I had taken out a loan, I would have had to start paying it back by now. While this method is pretty solid in making sure it’s paid off in a certain amount of time with relatively low interest rates, the timing didn’t work for me.
Making the Most of the Credit Card
I’ve already started charging small things to and paying off the new credit card. A practice many professionals say will help your credit score. My new card also has a pretty nice limit and staying way below the suggested 30% balance mark should also help my credit score.
I didn’t escape the first card with 0% interest but I’m working on paying that card off completely by the end of this year. My new card has a specific purpose and I’m trying my hardest to only use it for necessities.
Before I got my new credit card, I researched for months on best practices. I had a ton of inquiries on my credit last year because of moving amongst other things. I’d been denied by another institution earlier in the year.
Getting this card and implementing smart credit card practices along with paying off my previous card is high on my financial goal list this year. Do you have any financial goals you’re willing to share? Let me know down below.
Photo by Ales Nesetril on Unsplash
Originally published at https://www.thepromillennial.com on January 8, 2019.
