Would you ever make a big financial decision without asking some questions first? Of course not! That’s because you want to have a 100% understanding of what you’re getting into before you sign your name on any agreement.

That’s the approach you should take when you applying for a new credit card. Yes, you might know how credit cards work in general, but what else do you know about that credit card you’re applying for?

Do you know if there’s an annual fee? Do you know how high the interest rate is on any credit card balance you carry? Do you know what caps and limits your credit card rewards programme has?

Here are some important questions you should not only be asking yourself, but your credit card issuer as well:

What Do You Need That Credit Card for?

Some of the most important credit card questions you should be asking aren’t for the credit card issuer – but for you. Asking yourself the right questions is critical – because nobody knows your spending habits, financial obligations and ability to make repayments better than you do.

After going over the pamphlet or landing page explaining the details of a particular credit card, take some time to think about the card and how you’ll use it.

Here are some very important questions to think about before speaking to a credit card issuer:

• What do you really need that credit card for? Is it for a specific purpose like air miles or petrol discounts, or is it just to fatten your wallet and boost your spending power?

• Will you pay your balance in full every month or will you just settle for paying the minimum? Can you afford to pay more than the minimum if you make a big purchase? Why can’t you pay more than the minimum?

• Are you prepared for the interest charges that accompany any outstanding balance? Do you know that credit card interest rates are 24% or higher? Are you prepared to spend months or years paying off that credit card?

• Do you fully understand the Terms and Conditions (T&Cs)? Do you really understand every fee and charge that comes with that credit card? Do you know what penalties you’ll have to pay and why you’ll have to pay them?

• Are you prepared for the consequences if you miss payments? Do you know the financial impact of missing payments? Do you know how the impact missing payments will have on your credit rating?

By asking these questions before speaking with the credit card issuer, you can save yourself the trouble of getting a credit card that you don’t really need.

What Questions Should Your Credit Card Issuer Answer?

So you’ve already answered the important personal questions surrounding your decision to get a new credit card. Great! But you still have many unanswered questions surrounding the details of the credit card.

For those answers, you’ll need to go directly to the source – the credit card issuer’s customer service representative. That’ll be your chance to ask the questions that’ll help you determine whether you want to add that credit card to your wallet or not.

Here are some very important questions to ask before you decide to sign up for that credit card:

• How long will the “free” rewards/air miles membership last? How much will you need to pay once the promotional period ends? Are there any fees, caps and expiry date on your points/air miles?

• How much is the minimum payment required every month? If you can’t make the minimum payment on your credit card balance, what fees and interest charges will you incur?

• What other charges will need to be paid if a cheque or GIRO payment is returned? Will you need to pay a fee on a rejected payment?

• What are the charges for cash advances? Will the charges differ for cash advances made in Singapore and overseas?

• What are the liabilities for lost credit cards? Will you be 100% liable for any fraudulent charges made with your card or is there a “liability cap” you must pay? What 

• What is the credit limit? Can you increase or decrease your credit limit?

• Will the Terms and Conditions (T&Cs) Change? How will the credit card issuer inform you about any updates to your credit card agreement?

By asking your credit card issuer these questions, you can get a better idea whether or not that credit card is really worth having.