Choose the Best Credit Card
Posted at by ifydcat on category CreditDo you have a credit card? If so, chances are that you are not using the best one relating to your situation. Read on to help you choose the best credit card.
For instance, a card used for 0% balance transfers will not necessarily be the best credit card for regular purchases, or one used to get cash back might actually work out more expensively than a low APR card.
Let us examine the three major reasons why people use credit cards:
Balance Transfers
It has become commonplace to switch credit card providers based on the length of the 0% balance transfer deals they offer.
If you have a significant balance on your card and you plan to pay it off over a number of months or years, then you have to take advantage of the different balance transfer deals on the market.
Purchases
This is the main reason people have credit cards and if you will use your card exclusively for purchases, you need to find one with the lowest APR (interest rate).
Some people might ask why not take advantage of a 0% purchases credit card deal. Well, it really depends on the normal credit card APR and how long you plan to use the card. Say for instance the 0% purchases deal expire and now you have to pay 18% APR when you could have applied for a 12% APR card, but with no 0% purchases deal? Which one would you rather have?
Cash Back or Air Miles
This one is not so simple, as many people think that they might as well get rewarded for it if they spend money on their card? Well, normally these types of credit cards have a fairly high APR.
Let’s use an example: Say you have to choose between two credit cards, one that has a cash back offer and one that does not. Easy choice, right? However, say the cash back card pays you $1 for every $100 you spend and has an APR of 15.9%. The other “normal” card has an APR of 13.9%. Now the normal card is the best choice, unless you pay off your balance every month and do not pay any interest.
Then you also get all the hybrid cards. Some cards might have 0% balance transfer and 0% purchases deals. Others might have a low APR for the life of balance transfers. This is where you need a really good guide to show you all the different factors when considering applying for a credit card.
So when choosing a best credit card, don’t just apply for the first one you come across. Decide what you want to use the card for and then check that everything that will impact this usage. Don't let things you have missed like high APR or high default fees make you regret your choice!