Choosing a Credit Card
Posted at by ifydcat on category CreditCredit cards are one of the most convenient and widely available forms of credit on the market today. With a little know how and research you can find the best credit card for you, which will give you the access to the funds you need at little or no cost.
Even in today’s financial product market, there are hundreds of different types of credit cards available, each with their own interest rates, benefits and drawbacks. Card issuers own marketing can make it card to compare cards but researching the market via methods such as an online comparison site or seeking advice can help narrow down the right card for your needs. Considering that you can save hundreds or possibly thousands of dollars by choosing the best credit cards, it is well worth the extra effort.
Where to begin? Before you compare credit cards you will need to think about your requirements, your lifestyle and your spending patterns. Your income and your credit rating will also be a deciding factor in which one you choose.
A quick glance at the credit card market shows that there are already different types of credit card which are tailor-made for different situations. They include secured credit cards, student credit cards, gold cards, reward cards and more. However, it is best to understand and look at a credit card’s features in detail and match these to your own circumstances and preferences before making a final decision.
To pay or not to pay
One important factor is whether you plan to pay off your credit card balance in full each month. If you are confident that you will clear what you owe every month interest rates will not be a major issue. If realistically you know you won’t be paying your card off in full each month you should try to secure a card with the lowest interest rate on purchases.
One thing to be aware of when choosing the best credit card for you are misleading introductory interest rates. Looks for cards with ongoing low rates, not just cards with good intro offers that will sting you later.
Grace period
When used correctly credit cards can enhance cash-flow and offer access to interest free credit. However, it pays to understand how and when interest is charged. Most credit cards give a 28-day grace period at the end of each month before the balance must be paid. If you clear the balance within this timeframe you needn’t pay any interest at all, so the longer the grace period the better.
Your credit limits and credit score
All credit cards place a credit limit varying anywhere from a few hundred to many thousands of dollars depending on the card and your financial position. This is the upper limit of your credit card balance, so if you plan to use your credit card a lot and not pay the balance off each month you should push for a higher credit limit.
Whether or not you will be granted the credit limit you want will depend on your income and your credit rating. If you have a poor credit rating you may find it difficult to get approval on a card. However, there are some products aimed at people with poor credit ratings, though fees and interest rates can be very high.
Charges & Fees
Many card issues charge heavy fees in certain situations. These will be set out in the terms and conditions so it is important to understand how and when they are charged. The fees your most likely to get hit with are late payment fees for failure to make monthly payments on time, fees for exceeding your agreed credit limit, annual card fees and cash advance fees incurred when accessing cash via an ATM. Most of these can be easily avoided with a little care.
Features and rewards
Credit cards offer a wide range of features. Among high income earners then Gold cards are popular as they not only offer higher credit limits but benefits to suit high income earners such as travel insurances and exlcusive privileges.
Reward cards offer benefits for regular use of your credit card or using your card at certain outlets. There are scores of these products on offer and the rewards can be anything from cashback to free air miles.
These are the main factors to consider before filling out your credit card application. A good understanding of the features you need and a little research will help you find the best type of credit card for you.
These tips should help find which type of credit card for you such as a compare credit cards or something else. The best card comes down to your needs and how you will use it.