Is A Fixed Rate Or Reward Credit Card Better?
Posted at by ifydcat on category CreditThere are a couple factors to take into consideration before applying for a new credit card. Is this going to be for the long term? Do you only need it to start a business? Will this be a card that you earn rewards for or maybe you are just trying to build your credit history? Each of these questions should be answered before you begin your search.
If you have had a credit card before then you know that the interest rate is very important. There are stories every where about people getting into trouble with credit card debt and them not even being able to pay down the interest earned on the principal balance. This is why you will want to take a look at a low interest credit card. With a low interest rate you can focus on paying down debt instead of worrying about it. Always try to pay down your balance so you do not get charged any interest at all to begin with.
All credit cards will eventually turn into a variable interest rate. What you can do before time is research a low interest credit card so you will know what your payments will be every month. Most banks will let you enjoy a zero percent interest rate for a specific time period like six months or a year. If you have to carry a balance from month to month and are on a budget then this type of card might be your best bet.
A example of a reward card is something you get back when you use the card on purchases like airline tickets. They are commonly called airline credit cards. Here you earn points towards your next airline ticket. You do not need to earn the full amount to redeem them. This can help bring down the costs of travelling. The interest rates might not be as good as normal cards without rewards but if you are good about paying your bills on time or in full then you have nothing to worry about.
There are many other types of credit cards to choose from. Regardless of which one you choose to apply for make sure you read all of the terms and conditions so you know what to expect with it. Doing so will remove any fears you might have about your next credit card statement.