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How to Pick the Right Credit Card

Building up your credit is one of the most important things you can do, regardless of your income or age. While you're in the search for your first credit card, be sure to ask these questions first.

DON'T JUST LOOK AT THE INTEREST RATE...

Make sure you know both the Interest Rate AND APR of any credit card before you apply for it. If the creditor provides you with a range of APRs, try to speak with a consultant to understand where you'll fall within that range. (Hint: as a new applicant, you probably won't get the lowest advertised rate.)

What's the difference between an Interest Rate and APR? In short: An APR is the interest rate and the cost of borrowing money combined. Read more here.

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IS IT A REPUTABLE BANK?

Fingers crossed this situation never happens, but if there's a crash in the lending market, you want to make sure you're secured. Read the fine print - is your money going to be OK in the case of an emergency?

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STARTUP FEES? YEARLY FEES?

If it costs $200 just to apply for a credit card - nix that idea. If it's equally as expensive to keep the card open, you might need to look elsewhere. You shouldn't have to pay to keep a credit card open. If it's a secured credit card, you'll put down a deposit when you open the card, but you'll get those funds back eventually.

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LET'S TALK ABOUT THE PERKS.

If you travel a lot, look into credit cards that offer airline miles based on the amount you spend. If you buy your clothes at a particular retailer, look into getting a credit card through them (free clothes!)

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WHAT'S THE MAXIMUM?

What are you planning on using your credit card for? Your answer will gauge the amount you limit should be. For your first credit card, chances are you'll have a limit of $1,000 - $2,000. Keep in mind that borrowing large amounts and frequently hitting your max will harm your credit.

SHOULD I USE A CREDIT CARD TO PAY FOR MY BOOTCAMP?

Short answer: probably not. Given the average bootcamp cost of $11,451, it's likely you will need to apply for multiple cards to cover the cost of your tuition. There are alternative ways to funding - such as scholarships, payment plans, and Skills Fund loans. It's time for your to weigh your options and find out which one is right for you.