subject: Credit Card: Factors To Consider [print this page] With the hundreds of credit cards in the market, choosing can be tough especially if it is your first time to apply for one. You can easily be misled since the marketing ads will of course highlight the best features of each card. This is why you should never base your decision from marketing ads alone. It is indeed very confusing. How will you find the right credit card for you? Below are the factors that you will need to consider when comparing credit cards:
The rate of APR. The annual percentage rate will be divided in 12 months which will be the interest added to your balance. If you can't guarantee that you can pay off your monthly balance completely at all times, look for a low APR credit card. This way, even if you have to carry your balance for the next month, the interest will not be too high.
The annual fee. The best credit cards are ones that don't require an annual fee. Some credit cards with low APR do have high annual fees. Since no annual fee credit cards often come with a considerable interest, the best thing to do is to always pay off your monthly balance in full so that even if the interest is somewhat costly, it will not be charged to you.
The interest on balance transfers. Keep in mind that purchases and balance transfers are two different transactions. If you want to move your balances from a high-interest credit card to a low-rate card, take advantage of ones that offer 0% interest on balance transfers.
Although these may only be for a limited time, you can use it to pay off your debts minus the interest. The bottom line is being able to repay all your balance before the introductory period expires. To buy more time, find a credit card that offers a longer promo period.
Transaction fees. Normally, credit cards double as debit card but not without a catch. It isn't recommended to use credit cards for cash advances since they usually charge you with interest right away. Some may even include additional costs such as transactions fees and cash advance charges that can bloat your charges unnecessarily. When choosing a credit card, don't forget to check on these terms.
The Grace Period. It's important to get a credit card with a reasonable grace period since it will give you more time to pay your balance in time and avoid incurring the interest rate. A 30-day grace period is reasonable enough for you to come up with your payment.
The rewards. Some credit cards have excellent charges and rates but with poor rewards programs. Some do come with excellent rewards program but usually, they are accompanied by high interest rates and charges. This is the reason why it is important to carefully weigh your options.
If you choose a credit card because of it promising reward program, you have to be more careful about submitting your payments to avoid incurring high interest. Some reward credit cards may even disqualify you from receiving your rewards if you're not timely with your payments. You should also make sure that the type of reward system you are about to apply for matches your lifestyle and credit card use.
