10 Things To Consider when Choosing A Credit Card

Choosing A Credit Card
Choosing A Credit Card

Choosing a credit card can sometimes be very difficult since one has to choice from a wide range of credit cards available and issues from numerous banks, organizations, stores etc. This article will show you steps to consider before you make your choice of credit card.

What is a Credit Card ?

Firstly, a Credit Card is a small plastic payment card issued by banks, building society and others to users to allows the cardholders to make payments on purchase goods and services on credit. Credit card enable you to borrow money from Bank to purchases, even if you’re buying the smallest of items or on a round trip to Asia. In as much as you refund the money within the “grace period” depending on the bank, you don’t need to pay any extra payment but if you don’t payback before the given period, you’ll have to pay for interest rates.

Choosing A Credit Card

When considering choosing a credit Card one has to think of what she/he wants to use the credit card for. It could be for online purchases, in-store purchases or on holiday, to make bill payment. However, you choose to make use of your credit card, the main issue is paying off your debt when due or spreading repayment over a period.

If you pay your balance payment off in full before the grace free period is over, you will enjoy the advantage of the interest free period. Thereby not paying the interest rate. There are cards with other incentives like cash back. In case, you’re using the credit card for borrowing and won’t pay off before the free period is over each month then, you’ll be paying the interest rate. Then you have to choose credit card with a low interest rate.

How Do I Choose A Credit Card For the first time?

  • Make up your mind if you really need a credit card
  • Determine the usage of your credit card
  • Consider you monthly and annual income and it’s sources
  • Review terms and conditions very carefully
  • Take to consideration a secure card that’s good for you.

What are the most common type of credit card?

Credit card are numerous this days and comes in varieties with interest rates, fees and reward programs, so when applying for any credit card it’s pertinent to know the one that is suitable for your financial lifestyle. The most common type of credit cards available are as follows; Balance Transfer, low interest rates, cash back, Reward points, Hotel and travel points, Gas points, Retail rewards, Airline miles, secured, prepaid, business, student.

10 Ways To Choose A Credit Card

A Credit Card is worth being careful with, so has to not cause any harm due to not lack of not paying attention to detail of such credit card. Here are 10 Unique ways to choose a Credit Card:

Interest Rate

Before choosing a credit card you have to consider the interest rate on the card. Interest rate in credit card appears as the APR or annual percentage rate. In some card it’s a fixed rate while in some it’s a variable rate that is tied to another financial indicator. Some card offer a special introductory interest rates. Ensure that you find out the duration of such offer and the interest rate will be at the end of the special offer. 

Decide Your Credit Limit

This is a certain amount of money that credit card issuers are giving out or borrowing you depending on your credit history. 

It is necessary to consider the credit limit that will suit your needs but that will not hinder you from storing up debt that will be hard to pay off.

Your spending Habits

Getting a credit card you must ask yourself this first question, on how to use such card. Depending on your spending habits consider the following;

  • If you’ll be carrying balance, then you need the lowest interest rate and a low introductory rate card
  • If you’re paying a bill in full at the end of the month, then the interest rate will not affect you, then look for a card with no annual fee and a longer grace period. 
  • Or it’s would be used for emergencies, then go for a no-frills card with a, low interest rate and with low fees
  • If it’s a daily purchases card, then go ford a card with a good credit limits and a solid rewards program.

Shop Around Credit Offer

Search for credit card that are offered via mail. Keep in mind the important things you need to know, such as rewards formula, interest rate etc and ensure you read the fine print. Get to Web pages and magazines to check out things about credit or get to your bank and make enquiry about the credit card offers. It is advisable to have your credit card account from your bank for convenience with your monthly bills. 

Fees 

Always check for the credit card fees that are attached to such card before applying for the card. Common charges include fees for transactions like balance transfer and cash advances or when you demand for increase in credit limit or when making payments via telephone. Therefore, look for credit card with reasonable fees and cards with no transaction fee and zero percent on interest for up to 12 months and do not pay for extra rewards programs. 

Penalty 

Credit card comes with penalty especially when you exceed or delay your monthly bills payment beyond the grace period given by the financial institutions. There are penalty charges for late payment of Bill or going over your credit limit. 

Incentives

A lot of cards issuers persuade and try to convince someone to use their card. Sometimes they do not charge extra for the rewards program, just exclusively to entice card users. Search for such credit cards with a flexible reward programs on travel or cash and rewards that are redeemable and easily earned

Balanced calculation Method

To carry balance in your card you must know how the finance charges are calculated. Common among others is the average daily balance, meaning that balance are added together on a daily basis and is divided by the number od days in the billing cycle. Keep away from credit card with two billing cycle because it increases your fees.

Specialty offers 

Some credit card specializes in certain sets of customers and sometimes grant them good deal such as students, Unions, Fraternal organization and employers, small business. 

  • Always get to the summary box of any credit card to read in details on any given information about the credit card. This also show you details on the terms and conditions. 

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