Here are some tips for choosing a credit card. All credit cards are not the same, and the differences can be quite significant depending on how a person uses the card. Before signing up for a credit card, as with any other financial decision, a consumer should weigh the available options and choose the credit card that is best for their individual needs.
Check Your Credit History for Mistakes
What credit cards that a person is eligible for will depend on a number of factors with their credit score being one of the most important. Consumer should check their credit score before applying for a credit card to assure the report is accurate. Of course, paying bills on time is also important to assure that the credit score stays high.
For most people, the interest rate is the most important consideration when choosing a credit card. A low fixed interest rate is ideal for most uses. Paying an annual fee for a lower rate might be a good idea if a balance is likely to be carried on the card for long periods of time.
Understand the Terms
Anyone who has every seen the terms and conditions that accompany a credit card application know that understanding every detail is unfortunately unlikely. However, consumers need to know whether or not the interest rate is introductory (and if so, when the rate will go up), if there an application fee, annual fee, other fees, and how the minimum payment is calculated.
Reward cards are very popular, but consumers need to make certain that the rewards will actually be used and that the rewards are not masking higher fees or interest rates. For consumers who make frequent purchases with their credit card and quickly pay it off, reward cards can make a lot of sense. Consumers should make certain that the rewards are for an economically strong company or can be used with multiple companies. Consumers need to understand any limitations on the rewards as well as some can only be used at certain times for certain things. Cash back is always a great reward.
Compare Side to Side
When the time comes to look at different credit cards, consumers should compare a few different cards side to side to see where the differences are. Many websites make this quite simple with interactive guides to help the consumer find the right card.