How To Choose The Best Credit Card?

March 25, 2012 by  Filed under: Credit 

So you have decided that you want a new credit card. Perhaps this will be your first card, or maybe you have several already. Either way, this guide will help you to choose the perfect credit card to meet your requirements.

There are so many different credit cards with so many different deals and we are exposed to them constantly. You’ll get marketing leaflets through the door and see adverts on the TV. You’ve most likely seen promotional stalls in shopping centres and been approached by the staff in your bank – not to mention subjected to online advertising, when you use the internet. Every card promises the ‘ best’ deal. So how do you know which card is the right one for you?

Firstly, decide what you are going to use the card for. Credit cards usually break down into several basic types. All have the same basic features, but some of them are better for certain things than others. Once you know exactly what you are going to use the card for, you’ll know which type of card you need and you’ll have eliminated a whole bunch of cards already. Then it’s a simple case of going through the cards of that type to find the best deal.

Most cards are interest free as long as you clear the balance in full when your statement arrives. However, there are also cards which have introductory offers of 0% on purchases for an extended period. If you need to pay for something now, but can’t afford to clear the balance for several months, extended 0% deal on purchases could be the right card for you.

Other types include:

Balance transfers

A balance transfer credit card offers a 0% deal if you transfer an existing balance. The 0% is normally an introductory offer and runs for a set period of time i.e. 6 months. Obviously, balance transfers are best for someone who already has a balance on a credit card which they are paying interest on. The benefit of the balance transfer is obvious. By reducing the interest to zero, all of the monthly payments will come off of the balance, allowing the customer to clear the balance much sooner.

A balance transfer card should really be used ONLY for balance transfers. Also using the card for purchases is not a good idea, as the card issuer will usually take the monthly payment from the 0% balance leaving a high interest balance accumulating on the card.

Reward Incentives

A reward credit card offers incentives through a points scheme or cash back. By using the card, for all of your outgoings, it’s possible to reap significant rewards, over time.

However, you should clear the balance in full, each month, as paying interest on a balance will cost you far more than you gain from the rewards. Reward cards are best for people who use credit on a daily basis, but plan to clear in full when the statement arrives.

There are also bad debt cards for people with poor ratings and special travel cards with reduced fees on foreign transactions.

Once you know exactly which type of card you want, a visit to an online credit card comparison site is probably the best idea. Here you can evaluate all credit card deals and interest free credit cards and fees to find the best deal. Once you have found the right card you can also apply online and often receive an immediate decision.

Article Source:
http://EzineArticles.com/?expert=Cary_L_Ryder

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!


You must be logged in to post a comment.

Prev Post:
Next Post: