You’ve decided to apply for a new credit card. Maybe it’s your first credit card, or perhaps you’ve decided to add to the cards you already have. Whichever the case, you need to understand that not all credit cards are the same. To find a great card, keep the following four points in mind;
- Credit limit
Your credit limit is the amount the card issuer is willing to lend you. There are several reasons why you need to find a credit card with the right limit. First, you cannot go beyond your credit limit. So, you need to find a card that’s willing to give you the amount you need. If you need $10,000, find a card that’s willing to offer that much. Secondly, you also don’t want to get too close to the limit. It can not only hurt your credit score but also cause your credit card provider to cut your limit. This is another reason why you need a limit that’s as high as possible as it gives you room to maneuver.
- Interest rate
Also known as the annual percentage rate (APR), a card issuer’s interest rate is the interest you pay on the amount you owe whenever you fail to pay your credit card balance on time. Many credit cards offer very low interest rates which are a good thing. Some even offer 0% APRs just to win consumers’ hearts. It’s in your best interest to find a card with the lowest APR possible or even go with a 0% APR card. Just keep in mind that those low or 0% APR cards often revert to rather high-interest rates if you don’t pay at least the minimum amount due on a bill in time.
- Fees and Penalties
One thing you’ll quickly learn from experts in the field such as CardGuru is that credit card providers are on a mission to take money from you. This is something you must never forget. From asking to increase your credit limit so they can get more money in interest to ask that you make payments by phone so they can profit from the processing fee, they’ll do everything legally allowed to take your money. It’s your job to find an issue that won’t charge you at the earliest opportunity. For instance, avoid issuers with unnecessary penalties, transaction fees, and any other opportunistic charges.
Finally, pretty much all credit card companies have reward programs. You want to choose the issuer with the most exciting rewards. Some card companies, for instance, offer incentives when you travel or pay in cash. Some also allow you to accrue points which can be redeemed for gifts and prizes. Choose a card provider that allows you to rack points quickly and redeem the points at places where you frequently shop such as local groceries and online retail stores.
Customer service, the cost of keeping the card, and balance computation method are other factors worth considering as are trust and reliability.