Those darn millennials and their many acronyms — what the heck does “FOMO” mean? FOMO is “fear of missing out” or the feeling that by passing up an opportunity, you’ll miss out on something great. This can apply to parties, trips, job opportunities or even meals. But it can also apply to a really awesome credit card.
If you’re currently suffering from FOMO and coveting your BFF’s new credit card, take a step back and ask yourself these three questions before saying “YOLO” and applying for a shiny new piece of plastic.
1. Does this card meet my needs?
It’s really easy to get caught up in the FOMO on a cool card, but you need to consider the card’s merits in relation to you. For instance, let’s say the card has a killer signup bonus. Awesome! Will you spend enough in the allotted time to get the bonus? Can you pay off that balance without accruing interest? If the answer to either question is “no,” the signup bonus doesn’t matter.
Be able to articulate why this card is a good card for you. Look at the card’s terms, rewards structure and perks. Does it have everything you reasonably want from a credit card? If not, you might want to skip on this one.
2. Was I interested in a new card before my BFF got this one?
Maybe you’ve wanted a new card for a while, and your friend’s new card seems like a good fit for your spending habits and rewards redemption preferences. Great! This may mean that your primary motivation for applying isn’t FOMO, but rather the desire or need for a card that suits you better than your current card.
However, if you weren’t in the market for a new card before your friend got one, this is probably just a case of FOMO. Applying for new cards too often can hurt your credit score, as the applications trigger hard inquiries on your credit report. Because of this, you should keep applications to a minimum and resist the temptation of getting a new card every time a friend does.
3. Am I a responsible credit card user?
You saw this coming. Credit cards should only be used by people who can reasonably afford to pay them off each month. Otherwise, it doesn’t really matter that a card has the perks you want or if you were in the market for a new card.
We believe in second (and third) chances around here, so even if you messed up with credit cards in the past, that doesn’t mean you can’t have a healthy relationship with credit in the future. If you’re getting this new card to try, try again with credit, make sure you have a clear plan to pay it off in full each month and a reasonable monthly budget.
Bottom line: Before you call YOLO and apply for your BFF’s credit card because you have a serious case of FOMO, take a beat. Ask yourself if this card will meet your needs and whether or not you were in the market for a new card before your friend got hers. And most importantly, ask yourself honestly if you can use a credit card responsibly. If the answer to all three is “yes,” go forth and apply. We hope you and your new card are very happy together.
Two friends image via Shutterstock