Selecting A Credit Card
How many "pre-approved" credit card offers do you get in the
mail in the average month that seem to shout at you to accept
the offer before it expires? If you're in the market for a
credit card, take some time to shop all the offers to get the
best credit card available to you.
First, look into the credit card terms and conditions. These are
the fees associated with making purchases on the card,
transferring balances to the card, taking cash withdrawals, and
late fees. You can easily compare the annual percentage rate
between credit card offers. The annual percentage rate is a way
to measure what the credit actually costs you. Beware of
variable annual percentage rates- and if you are considering
credit card offers with variable APR's, find out how often the
rate can be changed, how it effects the finance charges you are
billed each month, and what the rate is based on.
Secondly, find out whether or not the cards in question charge
an annual membership fee. Annual fees can be anything from $25
to $100 a year, with some platinum credit cards charging several
hundred dollars. This is a fee that you are required to pay each
year just for having the card in your wallet- even if you never
make a purchase or transfer a balance to the account. If you're
going to pay an annual fee on a credit card, there should be
rewards or low rates that make the fee worth paying.
Look into the grace period of the credit card. Many cards will
give you about 56 days to make payments interest free, without
finance charges, just by paying your entire balance on time.
Cards that do not have this free period can charge you a finance
charge from the date you make a purchase on your card, or from
the date each charge is posted to the account. Also consider
transaction fees, and another fees associated with having the
credit card. Just about every credit card will issue a fee if
you take a cash advance or make your payment past the due date.
Find out whether or not there is a monthly fee charged to the
account when you don't make any purchases- there are some credit
cards that will charge you monthly even if you haven't taken the
card out of your wallet, and those are fees you can easily avoid
just by selecting a credit card that doesn't have these
additional fees.
You'll also want to consider the reward programs offered from
each credit card you are considering applying for. If you are a
frequent traveler, it makes sense to look at rewards programs
that earn you discounted flights, hotels, and car rentals when
you purchase your travel expenses and tickets using the credit
card. Over time, your purchases will result in free travel,
making the credit card with the travel rewards program a great
choice for the frequent traveler. A very popular form of credit
card rewards program is the cash back offer. These credit cards
will reward spenders with 1% to 5% cash back for all of their
purchases- either credited back to the credit card or sent as a
check to the card holder. This may be a good card for you if you
pay your balances off each month in full- because typically a
cash back card will have a higher percentage rate than cards
without cash back programs.
The bottom line in selecting a credit card is not to jump on the
first offer that comes through the mail. You really need to
spend a little time doing your homework and learning about the
different credit cards available to you in order to get the best
rates and best deals for your credit purchases.