There are a lot of credit cards, and there are equally as many options. Although it may seem easy to pick them all, it is better to pick less of the better ones. How do you sort through all of the options, and which are the most important to consider when choosing your next credit card?
First thing, try not to be swayed by promotional periods. Many lenders will lure you in with 0% APR or no annual fee the first year. Then you will be surprised when the actual fees are imposed. Rather than falling for the bait and switch, look for standard APR, and annual fees. Research reviews about a cards customer service, and consider any reward options.
The annual percentage rate is the amount of money a credit car lender can charge you in interest. It is commonly known as the APR and is based on government imposed interest rates. APR rates on credit cards can vary highly and can range from 3% for those with good credit to 30% for those with poor credit. When comparing options, go for the card with lower APR if you intend to use it.
In addition to comparing the actual rate, APR can also vary by type. Some banks will offer whats called a fixed APR. This means that for the most post, the APR will remain the same the life of the card. With significant market changes, the rate may change, but it will not be immediate, and the card issuer will notify you in writing. Variable rates are directly based on the prime rate and can change as often as it does.
Many cards will include an annual fee. This also can vary based upon credit worthiness, and some cards do not even have this fee.
Customer service is an important thing to keep in mind about a potential credit lender. Although it is difficult to figure this out before hand, looking for specific features beforehand can give some insight into how they do business. Benefits such as fraud prevention, credit limit notification, and multiple ways to access the account will only make being a customer easier.
After you have compared the APR, annual fee, and customer service, reward programs are a nice added benefit. Some cards will reward you with perks such as cash back, travel vouchers or even points used towards everyday purchases. The only catch most times is that you actually have to use the cards to earn the rewards. If you choose a card based on rewards, make sure it is a reward you can actually use.
Although there are many options in credit cards, it is easy to sort through them if you focus on what is important. Things such as APR, Annual fees, and even customer service can cost or save you money. Use these things as a guide, and picking the right card should be a lot easier.
