subject: Choosing The Best Credit Card Made Easy [print this page] Choosing The Best Credit Card Made Easy Choosing The Best Credit Card Made Easy
With innumerable offers floating in the market, choosing the best credit card is often a very difficult and confusing thing. Add to it the fact, that some offers are too good to be true, yet there is always a lingering suspicion about the validity of the offers and the hidden catch.
Things To Be Careful Of While Choosing A Card
Many credit card companies offer low interest rates in the beginning, but in a few months time, this shoots up to astronomical numbers, leading to excessive balances, default in payments and tarnishing of credit history.
Some credit card companies attract customers with zero initial interest rate for balance transfer and debt consolidation. Customers must ensure they know what the subsequent interest rate is once the initial period is over.
The rewards and cash back offers which seem so attractive might be useless as they may be valid only in a few outlets which you may never like to frequent.
Factors To Choose The Best Credit Card
These are the things which most review sites and rating companies check to indicate what the best credit card is. Each of the features are then rated based on whether they are very good, good, average of not worthy of consideration.
Starting Interest Rate
This is an important factor to consider, especially when you are doing balance transfers or consolidating outstanding balances of many cards into one. No interest on the outstanding balance for a few months ensures you can pay off the principal without incurring further debt. Some student credit cards too have a 0% interest rate to start off. People who are planning to make big purchases can avail this as they get interest free loan for a few months saving them quite a bit on the expenditure.
Regular Interest Rate
This is the interest rate that credit card companies charge after the initial period of introductory rates. The best credit card always has a low regular interest rate. This is for two reasons. If you accidentally miss the deadline for paying the bill, you would not incur a heavy interest or penalty. Secondly, sometimes outstanding balances have conflicts and a low interest doesn't add to extra stress due to rising balance till the conflict is resolved.
Loyalty Points
Loyalty points are common in many credit cards. What a customer needs to check is whether the loyalty points can be redeemed to something of your choice or whether there are fixed gift vouchers. The best credit card will allow you to get cash back from your loyalty points or discount on a future expenditure. The disadvantage of set gift hampers is that you cannot use all your reward points efficiently before they expire.
Annual Fee
You must ensure that the credit card doesn't have a very high annual fee, renewal fee or processing fee. Most credit card companies waive off the annual fee in the first year and customers need to be aware of that too.
Ongoing offers
Many good credit cards have continuous stream of offers in various stores, travel packages and lot of deals to choose from. After the interest rate, this is the most important factor for the sheer reason that these offers truly justify the risk of the high interest rates.
