No matter how much information is out there about credit cards, there still seems to be many unanswered questions people have about them. Especially for younger folks who are taking out their first credit card in an effort to raise their credit score. With credit cards, especially lower balance cards, one of the more surefire ways to raise your credit score is by opening up a new credit card. And if you do it at a younger age (within reason, of course—no child really needs a credit card), then this will benefit you down the line and will give you an additional credit score boost because you’ll have an older credit history.
Here are 3 common credit card questions people often wonder about:
Should I get a card with an annual fee?: Because there are so many awesome fee-free credit cards on the market, you probably shouldn’t be stuck with a card that has fees in the first place. If you’re a newcomer to the credit card world, then you should probably avoid taking out a card with a fee as your first card. However, credit cards that have fees attached them also usually come with some pretty enticing benefits. If you’re a little more experienced in your finances and are looking for card benefits, it might be a better option to get a credit card that does have a fee, depending on the benefits you’re looking for. Weigh the pros and cons for the best answer for you.
Should my kid have a credit card?: It may seem like the “it” thing for a teenager to have, but unless they have a job to pay down the balance the answer is no. It’s honestly just a tricky situation that could end up hurting your kid, especially if you aren’t able to help them chip away at the balance.
Will it hurt if I close out the account on a credit card?: If you want to raise your FICO, the answer is probably no. It doesn’t add points to your score. However, if it’s your oldest credit card and you’re looking to close it out, then that might not be the best idea because then it will make your credit history look younger than it actually is, which doesn’t benefit you and could actually lower your credit score.