Ready or Not: 6 Signs of a Good Credit Card Owner

There are a lot of perks and privileges that come with owning a credit card. However, before you submit an application, you need to first assess if you’re truly prepared to own one. Doing this can help ensure that you can enjoy all the benefits to the fullest. At the same time, it will also prevent you from overspending and drowning in debt due to hefty fees.

To start with your personal evaluation, here are the top qualities or indicators of a good credit card owner:

You Have a Stable Source of Income
When applying for a credit card, you’ll be required to submit a certificate of employment and/or a copy of your payslip for the past three months. That’s because credit card providers want to ensure that you have a source of funds to pay for your credit card dues. For these companies, stability means that you have the potential to be a good-paying customer.

If you’re a freelancer, don’t worry. You can still submit proofs of income in the form of remittance receipts and invoices. The bottomline is that you should be earning consistently so that, in the event that you use your credit card for bills and purchases, you can pay your dues on time.

You Are Financially Responsible
More than financial stability, financial responsibility is crucial for credit card owners. The former can be proven by documents; the latter is measured by money-related habits. This means that honesty is absolutely required.

Some criteria you need to look at include the following:

● Do you have savings and/or emergency funds?
● Do you follow a monthly budget?
● Do you pay all of your bills on time (or even in advance)?
● Do you pay your debts with your earnings alone and not with other debts?

If you pass these criteria, then it’s safe to say that you’ll be (or you already are) a good credit card owner. Remember: credit cards can help you grow more financially mature and be more financially flexible, but you have to be financially responsible first!

You Are Financially Independent
It’s not bad to ask for financial assistance. In fact, there may be times when you have to take out a loan to make a major purchase or if you have an emergency that can’t be covered by your savings. However, if you often borrow money from your family or friends (and don’t pay them back on time), then that’s another story.

If you aren’t financially independent yet, hold off on applying for a credit card or using your credit card. Make sure that your earnings are sufficient for all your needs first. If you’re falling short, consider creating new streams of income or cutting back on your non-essential expenses.

You Aren’t Easily Tempted By Sales
Some people think that having a credit card means having an unlimited budget. This is obviously not the case. Credit cards have spending limits, after all, and credit card companies impose these limits for a reason.

That said, responsible owners understand these limits and thus use their credit cards strategically. They don’t just buy just because there are sales, buy one get one, and other promos. Instead, they scrutinize offers if they really are worth their money before they shop. Even then, they don’t grab all bang-for-your buck promos but rather only those that they need.

You Are Creditworthy
Being creditworthy doesn’t mean that you shouldn’t have debts at all, although that is that ideal scenario. Instead, it means that you can pay back your debts on time. This is obviously important when it comes to credit cards.

Your creditworthiness is determined by your credit score, which can be affected by several factors. These include the amount of your debt/s, if any, and your payment history. Having an active bank account that receives regular deposits might increase your score, while having plenty of debts can decrease it.

You Understand That Using a Credit Card Is a Privilege
Having a credit card doesn’t give you license to spend, spend, spend. Instead, it gives you financial freedom by giving you rewards when you use it wisely. In short, you need to understand the terms and conditions of using a credit card before you can truly maximize its potential.

You also need to familiarize yourself with different terminologies, dates, and fees. The cut-off date, for example, is different from your due date. In addition, late payment fees are different from interest charges. When you fully understand the complexities of using a credit card, then you can consider yourself ready to actually use one.

This list isn’t meant to discourage you to apply for a credit card or to use yours if you already have one. Instead, this is meant to ensure that you can stay worry-free when you shop, pay, and dine.

So—are you a good credit card owner or do you have the potential to be one? Hopefully, this list has helped you answer that question.