Finding the Best Credit Card
With so many special offers from credit card issuers showing up in your mailbox or online, it’s no wonder that the task of finding the best credit card for your lifestyle can seem so daunting. You may be tired of the constant pressure to sign up for a limited-time offer and overwhelmed by the many options. There are a few basic things to consider which can help you to find the best card available.
An annual fee is a yearly charge by some credit card companies to use their card. Some of the first credit card promotions involved offering no annual fee. This has now become an element to look for in a desirable credit card. Even if the company you are considering does charge a fee, you may be able to ask them to waive it as an added incentive for you to become a new customer.
Next, there is the issue of APR. Credit card companies make much of their money by charging and interest rate or fee for charges that you carry in your account as a balance. The annual percentage rate is the cost of carrying a balance on a loan for a year; this is equal to the amount owed in interest each month multiplied by 12. No matter what the average annual percentage rate for credit cards is, some companies will offer much lower rates. These special promotional APRs are often only applied for a certain period of time, known as the teaser. In some case this will be as low as 0% for purchases and balance transfers for the teaser period. Remember that these special rates are only temporary however, and be sure to look at the normal APR for any card you are considering. In general, a fixed interest rate is the safest to apply for, because it will only change if the issuer notifies you through an amended cardholder agreement with at least 15 day’s advance notice. Variable interest rates, on the other hand, change based on an economic index such as the prime rate and may catch you by surprise.
If you want to avoid paying any APR on your credit card, then the grace period becomes important. This is the interest-free time between the date of a purchase and when that purchase appears on your statement. Grace periods only apply if there’s no outstanding balance on your credit card. If you pay the balance off in full each month during this grace period, then you avoid any interest charges.
The next thing to consider is fees. Most credit cards charge various fees for credit activities such as using an ATM or getting a cash advance. There are also often late payment fees and over-the-limit fees to be aware of. All of these fees will be listed in the cardholder agreement.
You may want to consider the credit limit that the card offers. This is the maximum amount you may owe on the credit card including all purchases, cash advances, finance charges and fees.
It’s possible that you are interested in finding the best rewards credit card program available. These include cash-back cards, some of which offer up to 5% cash back on grocery, drugstore and gasoline purchases, reward cards offering points towards certain items or gift cards earned for each purchase you make.
In order to find the best credit card, you may want to do a side-by-side comparison of the offers that seem to be the best options for you. You could create your own comparison chart in a spreadsheet program such as Microsoft Excel or you could use one of the many comparison charts that are already available online. One advantage of using the comparative tools on the Internet is that you can research cards using certain categories. This allows you to choose the benefits that work best for you. You may also be able to get more specific details about a credit card program or find offers that you were unaware of. No matter how you decide to compare the possibilities, you can find the best credit card offer that is available for you.