Whether you’re upgrading to a credit card that suits your needs better or applying for your first credit card, it’s important to know what to look for. Getting the right credit card helps you manage your cash flow when used wisely and also enables you to enjoy excellent benefits like cash back and rewards. With numerous good credit cards to apply for, how do you choose the right one?
Here are a few factors to consider:
Credit Card APR
Interest charged on a credit card is known as the Annual Percentage Rate, which is the rate you pay on the amount you owe on a card. Most credit cards offer a low introductory APR for a temporary period, allowing you to pay down balances or even credit card debt with a lower interest rate, sometimes even 0% APR.
According to Best.creditcard, it’s important to check a credit card’s APR before applying as well as the grace period offered for any purchases made using the card. When you fail to pay the minimum amount due on a bill on time, your card’s APR may revert to the default rate, which is usually the highest rate charged on the card.
Credit Card Costs
A credit card may offer you great benefits, but the fees and costs associated with it may be too high. It’s always advisable to carefully read the fine print before finalizing credit card application. Find out what annual fee is charged. Most cards that charge an annual fee come with rewards like travel savings that can offset the annual fee cost.
You could also opt for a card that waives the cost for the first year or a card with no annual fee. Also, consider the foreign transaction fee charged, especially if you travel overseas a lot. Make sure that you understand all the costs charged on a credit card to avoid finding yourself in a situation where you’re paying more than you should, to enjoy credit benefits.
One of the reasons why most people love credit cards is the rewards programs they offer. Everyday purchases can easily earn you points which you can apply toward retail purchases, travel or cash back. To take advantage of this, you should apply for a card that rewards you for where you spend most.
For instance, if you regularly spend at the grocery store, gas station or online retail shops, you should get the right card based on your spending. It’s important to know the business credit card reward programs offered by a provider while also watching out for debt. Chasing rewards can easily rack up a credit card balance you can’t afford to repay.
Flexible Credit Limit
Look for a credit card that offers a flexible credit card limit that comfortably meets your needs, but not too much that it leads you into debt. If you’re just getting started with credit card use, getting a low-limit card would be a good start. With time, you can get a card with a higher limit for larger monthly expenses.
The key here is knowing your spending patterns. If you’ve not been responsible with your credit card spending and always find yourself falling back on payments, then you should avoid a higher-limit card that will most likely let you take on more debt.
There is no single credit card suitable for everyone. The best credit card depends on what you’ll use it for. For instance, if you’re paying down credit card debt, you’ll want a card that offers lower interest rates. If you travel a lot, a credit card with a great travel rewards program would be recommended.
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