Instant Approval Credit Cards – Use Caution

Many providers are offering instant approval for credit cards. Store cards offer great deals such as instant approval and 10% off all instore purchases. These offers sound great and can be very tempting. So what can go wrong?

Firstly, always ask yourself the simple question – Do I need another credit card or store card?

Having multiple credit cards can cause certain problems:

Having many credit cards can affect your ability to be approved for a loan in the future. All credit limits are seen as a potential for debt. Even if you haven’t used this credit, it it still considered as a potential for debt.

Having multiple credit cards can tempt us toward overspending. This can increase our potential for getting into debt and can have a negative affect on our financial future.

Having multiple credit cards also means having to keep track of each account. We need to monitor monthly spending, credit card balances, interest rates and due dates. The more cards we have, the more we are likely to miss payments by the due date, and incur extra fees and charges.

Another thing to be aware of is that many store credit cards can have a higher interest rate. Having a higher interest rate and not paying your balance off in full could negate any possible benefits. Be sure to check out the current interest rate and the number of interest free days being offered. Also find out what the fees and charges will be if you miss a payment.

Credit cards can make our lives easier, but we need to learn to use them responsibly. Check out our Credit Card Tips for more ways on how to choose the best credit card.