How to Get A Credit Card That Is the Best Choice for You
If you are considering getting a credit card, there are key issues to consider before you make up your mind.
A very important point is that all credit card companies advertise the benefits only.
To make a correct decision, you need to read the fine print, too.
Look for hidden costs, such as an annual fee, a one time set-up fee or a cash advance fee.
Also look for any interest rate changes if you do not pay your balance on time.
I have seen cards that gave you a $500 credit limit, but by the time you took off all the fees, you used up $120 from the 500.
The next thing to consider is the interest rate.
Many times the initial interest rate is low, even 0%, for a time period, such as six months or a year.
This usually applies to transferred balances and new purchases.
Check out what happens When the introductory time period is over.
Will the interest rate skyrocket? Another catch is that if you do not pay your balance on time, that will most probably negatively influence your credit rating, and, as a result, you will lose your special interest rate and your interest rate could go up from 0 percent to 34 percent.
The next thing to consider is, what Will You Use The Card For? There are different type of cards.
Balance Transfer, Cash Back, Gas Rebates, Hotel Rewards, Low Interest, Travel Rewards, Prepaid Cards, Retail Reward, Student, Credit Repair cards - these are some of the options.
You need to pick based on Which benefit best fits your needs.
Many cards also offer incentives.
Even though many of these seem nice, you have to use your card a lot to get them.
This could easily become a trap -- trying to spend more to save more money.
If you will use your card anyway, then you might as well get something for it.
However just to spend for the benefits is usually not worth it.
Otherwise the credit card companies would not be offering you the card in the first place.
A very important point is that all credit card companies advertise the benefits only.
To make a correct decision, you need to read the fine print, too.
Look for hidden costs, such as an annual fee, a one time set-up fee or a cash advance fee.
Also look for any interest rate changes if you do not pay your balance on time.
I have seen cards that gave you a $500 credit limit, but by the time you took off all the fees, you used up $120 from the 500.
The next thing to consider is the interest rate.
Many times the initial interest rate is low, even 0%, for a time period, such as six months or a year.
This usually applies to transferred balances and new purchases.
Check out what happens When the introductory time period is over.
Will the interest rate skyrocket? Another catch is that if you do not pay your balance on time, that will most probably negatively influence your credit rating, and, as a result, you will lose your special interest rate and your interest rate could go up from 0 percent to 34 percent.
The next thing to consider is, what Will You Use The Card For? There are different type of cards.
Balance Transfer, Cash Back, Gas Rebates, Hotel Rewards, Low Interest, Travel Rewards, Prepaid Cards, Retail Reward, Student, Credit Repair cards - these are some of the options.
You need to pick based on Which benefit best fits your needs.
Many cards also offer incentives.
Even though many of these seem nice, you have to use your card a lot to get them.
This could easily become a trap -- trying to spend more to save more money.
If you will use your card anyway, then you might as well get something for it.
However just to spend for the benefits is usually not worth it.
Otherwise the credit card companies would not be offering you the card in the first place.