Credit Card Tutorials

What to Look for when Comparing Credit Cards

The purchase of any item should involve careful consideration and comparison shopping methods. Shopping for financial services such as credit cards is no different. There are many aspects which should be taken into account when comparing credit cards.

APR
APR is defined as the annual percentage rate that is associated with the card. Cards with a lower APR are available to those consumers that have a higher credit rating as the risk associated with the lender is lower. Most often, the credit card with the lower APR is the one that consumers are going to choose.

Introductory Offers
Introductory offers vary from company to company but often entail lower interest rates, or even zero interest rates for a period of twelve to eighteen months. This zero percent APR is available on balance transfers and purchases throughout the introductory period. Be sure to determine any fees that are associated with the balance transfer (which are often a standard of 3% of the balance that is being transferred to the credit card).

Rewards
Are you seeking a credit card that can give you something back for the purchases made on the card? If so, than you have the option of cards that offer cash back or points that can be redeemed for airline travel, hotels, merchandise and gift certificates to your favorite stores. Choosing a card with a rewards program can enable you to make the most of your spending habits. Be sure to choose a rewards program that has no enrollment fees aside from the annual fee of the credit card, and no limits on how many points can be earned and redeemed throughout the program.

Annual Fee
Does the credit card come with an annual fee? The annual fee that is associated with many credit cards can cost between fifty to one-hundred dollars per year. This fee will be added to the first statement of the credit card after it has been issued, and the first statement of the year thereafter. Many cards are available without a fee – even cards that offer excellent rewards programs.

As an introductory bonus, many credit card companies offer a no-fee first year after enrolment into the credit card program. After this point, the annual fee is added to the balance of the credit card.

When choosing a credit card, it is important to read the fine print of the credit card contract. Many times, there are terms that outline if a payment is missed than the interest rate can be raised to the default rate of the credit card company. Many consumers are unaware that this default interest rate can be as high as thirty percent! The default rate is even higher on retail credit cards.