Credit Cards & Credit Score: What You Need to Know

How does a credit card work? How do you get a good credit score? How do I pick my credit card issuer? Believe it or not, these questions are normal for people to ask when it comes to credit cards, credit scores and things of the sort. Here are some quick answers for you ladies, in case you have any!

A credit limit is the maximum amount you can put on your credit card, and it affects your score in the way, the higher the amount, the higher your credit score. A good credit score is 700-745, a bad credit score is below 600, and great is above 750. Different factors go into your credit score, some of these being length of the account, any late payments, and number of accounts you have. You could always ask for a credit limit increase, if you find yourself starting to make bigger purchases on your card with increasing your score. However, a higher limit does NOT mean you should be spending more, stay within a realistic amount so you’re able to pay off as much as you can on your payment dates. 

Why does your credit score matter? A bad credit score will lead to higher interest rates, less loan options, housing, and can sometimes even affect your employment. Consistency will always improve your credit score.

It’s also important to know about your credit card issuers and networks before picking one. So first we have to understand the difference. In my professional opinion, the primary difference between credit card issuers and credit card networks is their distribution and use. Credit card networks decide where your credit card can be used, while the credit card issuers are simply the branded credit cards issued from that specific bank. Network credit cards, like Visa and Mastercard, have predetermined interest rates and fees at the certain places they can be used. Credit card issuers can be used anywhere, with overall fees for the balance or monthly payments for the card, not specific to the places it’s used.

When comparing credit card issuers, my best advice is to always ask questions! Whatever fees or monthly payments you might have, ask how they can affect your credit, and compare the brands you’re interested in! Do your own research!! Don’t simply let a man in a suit at the bank tell you why his company has the best rates, decide that for yourself with your own information. My #1 piece of advice when comparing different credit card issuers is to look at the APR or Annual Percentage Rate, that is the interest rate you pay off every year. Some companies might be higher depending on what or how frequently you use the credit card, so pick one that suits you.

It is always important to choose the right credit card for you, especially the right credit card network. As I spoke about before, credit card networks are not accepted everywhere, so it is extremely important to choose one that will be accepted at the places you plan to spend it. The most widely accepted brand is Visa, so maybe that is one to look into, but it really depends on the person. So pick whatever is right for you!