5 Questions to Ask Before Signing Up for a New Credit Card

There’s no shortage of attractive offers for new credit cards. The credit card industry is extremely competitive, and you are likely to come across advertising for new cards on television, in print, online, and even on airplanes. But as compelling as these offers can be, you still need to think carefully before applying. (See also: Pre-Approved for Credit Card Offers: What Does It Mean?)

Opening a new credit card account is an important financial decision, and you should consider these five things first.

1. Can you manage a new credit card account?

Before you even begin to consider which credit card to apply for, think about if you need a new credit card at all. If there’s any chance that having a new credit card will entice you to overspend and incur debt, then it’s best not to apply. (See also: The Fastest Way to Pay Off $10,000 in Credit Card Debt)

Keep in mind, too, that each new credit card you have will generate a new statement to review each month, and another bill to pay. If your new card is from a different issuer than your other cards, then you’ll need to create a new online login and you might want to download a new mobile app. Having more cards than you can keep track of increases your chances of losing them or having one stolen.

2. Does this credit card meet your needs?

Just as there are dozens of different cars made for nearly any kind of use, there are hundreds of different credit cards designed to meet every conceivable need. If you tend to carry a balance on your credit cards, then you should be looking for a card with the lowest possible interest rate.

You could also look for a card with an interest-free promotional financing offer, to help you pay off your debt sooner. (See also: How to Pay Less Interest on Your Credit Card Debt)

If you always avoid interest charges by paying your entire statement balance in full, then you should be earning rewards for your spending in the form of points, miles, or cash back. (See also: Cash Back vs Travel Rewards: Pick the Right Credit Card for You)

3. What interest rates and fees will you have to pay?

Before you apply for a credit card, you should understand all of the costs of the card. Fortunately, credit card issuers are required to prominently disclose the important rates and fees in a standardized table. Any time you see a credit card application, you can look for a link to the “terms and conditions” or “rates and fees.” There, you will find a list of fees including the annual fee, late fee, cash advance fee, balance transfer fee, and foreign transaction fees, if any. It will also show you the standard interest rate and any promotional rates for new purchases, balances transfers, and cash advances. (See also: Simple Guide to Evaluating a Credit Card With an Annual Fee)

4. Do you qualify for approval?

There’s no point in applying for a credit card if you won’t be approved. First, you need to look up your credit score. Most credit card issuers now offer free access to your credit score online, and there are several websites that can also provide you with a free credit score.

Next, you need to research the credit cards that you are applying for, and learn what kind of credit score is needed. For example, a credit card issuer’s website may list each card according to the type of credit history needed, such as “Average” or “Good.” In addition, many credit card issuers will have special cards designated for people who are rebuilding their credit. Finally, you can assume that the most competitive premium rewards credit cards will only be offered to applicants with excellent credit. (See also: How to Use Credit Cards to Improve Your Credit Score)

5. Is this the most competitive offer available?

It’s easy to find credit card offers, but it can take some time to locate the most competitive offer for your needs. If you are looking for a card with the lowest interest rate, then you need to look at the terms and conditions of multiple cards to find the best offer. And if you are trying to earn rewards, then you need to estimate the value of the rewards you would receive from the card, based on your own personal spending habits. Finally, you also need to take into account the value of any cardholder benefits offered, and the cost of the annual fee and other fees. (See also: Credit Cards With the Best Sign Up Bonus Offers)