Thousands of Americans apply for credit cards every day, and before you become one of them, maybe you should stop and ask yourself why you're applying for a certain card at this particular time. There certainly are good reasons for wanting to be approved for a line of credit. Unfortunately, there are also unhealthy justifications for getting a credit card.

When Wanting More Credit is Good

It is all too easy to mismanage credit, accumulate debt, and wreck your financial profile. However, it is also not difficult to use credit responsibly, not allow your debt to outpace your income, and improve your financial standing.

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  • Are you building or rebuilding a credit history? Properly using a line of credit is one of the best ways to increase your credit score. If you don't overspend, only utilize up to 30% of your limit, and pay your bills on time every month, you will substantially improve your credit rating over time.
  • Do you need to make a large purchase? Maybe your home requires improvements or you need to buy textbooks for college classes. Perhaps you are starting up a small business. If you can get a credit card that has a good rewards program, you can buy what you require and earn some perks (airline miles, cash back, etc.) at the same time. Just make sure that you pay the balance when it is due in order to avoid paying extra in interest charges.
  • Do you want to use the card for emergencies? While nothing is better than building up an actual emergency fund, keeping a line of credit open as back up isn't a bad idea. This way, you're sure to be covered if the emergency that comes up is large enough to deplete your socked away cash.

When You Need to Rethink Credit

If, on the other hand, you don't have a clear plan in mind for the new credit card, applying for it may only lead to trouble. Take a moment and ask yourself:

  • Is there a chance that the card will lead to impulse buying?
  • Are you only signing up to save a small amount on a current purchase?
  • Is the interest rate on this card exceptionally high?
  • Can your budget truly handle an additional bill every month?

Having more buying power is enticing, but it is only through proper credit practices that sustainable purchasing power can be achieved. Yes, you need credit. And if you already have an installment loan or two in your credit history, taking on a little revolving credit (aka a credit card) is a wise move. The addition will lend to your "credit mix" on your report, and make you a more desirable candidate for financing. Just make sure that you shop around and apply for the card that offers the most competitive rates possible.

Another Way to Improve Your Credit

Installment loans are even better than credit cards when it comes to building or rebuilding credit. If you're in need of reliable transportation that comes with the opportunity to boost your credit score, Drivers Lane can help, possibly with an auto loan that requires little or no money down. Regardless of what your credit situation looks like, we can find a financing solution that works for you.

Just fill out our fast and secure online application to get started today.