Is your mail flooded with offers of credit cards, all with seemingly irresistible benefits? Wondering if there’s a one-card-that-fits-all? Not sure which credit card is best for you? Here are some tips to help you choose one that’s right for you.
What sort of spender are you? Do you buy expensive branded lifestyle items, or do you swipe your credit card for groceries? Do you do just big-occasions, or do you use your card for everything? Always choose cards that suit your style of spend.
Here’s what to look for in a card.
Some cards come without annual charges. These may be an inaugural offer or a permanent feature. Check whether the card offers an interest-free period. Most cards offer 45-60 days. After this, the issuer gives you credit rollover of 3-20 months. During this period, you may pay a minimum (as low as 1.5%), a fixed percentage, or all of the outstanding, with interest.
Check the Annual Percentage Rate (APR). This tells you how much you end up paying annually. Some cards have lower interest rates. If you use your card regularly and if you allow rollover, lower interest rates are better for you. If you use your card for travel or shopping, check out cards offering frequent flyer miles, or cards issued by shops. Wedding planners even issue special cards as part of wedding packages to help you pay your wedding expenses. These usually get you special rates at wedding-specialty shops.
Most cards allow balance transfers. This feature will allow you to spend on one card with greater benefits, and then transfer the outstanding to a card with lower interest rates. Check for charges on this facility. How much cash can you draw, and how much will you be charged? Will you be charged immediately or after some time? Find out how much.
Many cards feature reward points for usage. Points may be redeemed either as collectibles or shopping advantages. There are even exciting things like holidays offered as rewards by some issuers, so pick carefully! Finally, check out the security aspect. How are loss and theft covered? What security is in place for Internet usage? Look for a card that gives you the least liability.
Though every issuer would like to assure you that their card does everything, this isn’t true. Each card offers you some advantages but has some shortfalls too. You can use more than one to get the most out of your credit cards.
Do you already have a credit card? How did you choose one that suits you best? What tips would you give those planning to get a credit card for themselves? Any words of advice or caution?
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