If you have a credit card, you may sometimes wonder whether it is worth getting another one. It is good to think this through though, before you get another card to make sure that it is the right decision. Ask yourself a few questions which will help you to make a better decision.
Why do I want the additional card?
To start with it is a good idea to ask yourself why you are looking for an additional card. Think about the reasoning for it. The most likely reason is because you want to get extra credit so you can spend more money on items. If this is the case then you need to think about those items and whether you really need them. It could be that you want to buy an expensive item but your other card will not give you enough credit because you have already spent on it and so you need a new one. It could be that you want to make sure that you use a credit card for a particular purchase because it will give you some security and insurance. This is because the credit card is more secure to use online than a debit card as there is a fraud protection and there is insurance so if the item does not turn up or is not fit for purpose and you cannot get help from the retailer or seller on getting money back, you can get it form the card issuer instead.
How will it help me?
Once you have established the reason why you want the card, you will be able to think about whether this is a good reason for getting one. Consider what you are buying with it and whether that item is even necessary. Consider whether the card might just tempt you to spend more money, perhaps on things that you do not really need. Some people almost see the credit on a card as money for them to spend and do not think about the fact that they will have to pay it back at some point.
Will I pay it off?
With a credit card you get different options for repaying. You can repay the full amount each month, by setting up a direct debit to do so or just making a full payment. It is easier to set up a direct debit as then you will not forget about making the payment. You could though, just choose to repay the minimum amount, which usually just covers the cost of the interest and a little more. If you do this you will have outstanding debt and will have to keep paying interest on it until it is repaid and if you always repay the minimum it could take a very long time to repay it all. You could choose to repay something in between these two amounts so that you start to repay some of the debt but not all of it. You will still be charged interest, but it will not be so much as you will not owe so much money.
What is the interest?
It is worth knowing how much the interest will be. It is often shown in a percentage and can be hard to calculate in monetary terms. However, it will say on the statement how much the interest charged will be if you do not pay it off, so use this figure is well worth finding and thinking about. Consider how much it is and whether you are happy to pay this much money extra for the item that you are buying. Obviously, you will not have got the new card yet to do this with, but as you already have a card, look at a previous statement and look at it on there and this should help you to work it out and decide if it is a right choice for you.