Lucrative sign-up bonuses and competitive rewards programs have certainly reinvigorated consumer interest in credit cards. But these incentives shouldn’t be the only reason you elect to fatten your wallet, especially if you’re prone to overspending.
Instead, ask yourself these nine questions before applying for a new credit card to determine if it will ultimately help or hurt your finances.
1. What is my current financial status?
The first step to figuring out if it’s the right time to take on some new plastic is to assess the current state of your finances. You want to make sure you have enough cash flow to pay off new debts, but remember to be forward-looking.
“Ask ‘is my employment status secure?’” Deatra Riley, financial education manager for non-profit credit counseling organization CredAbility, says. You also should make sure you have both a short-term and long-term plan for saving in place before you take on a payment method that could potentially affect your ability to put money into a bank account.