It really has never been easier for you to get your hands on a credit card; even those with the most embarrassing of credit histories can qualify for high-interest, small balance credit cards to help with rebuilding their rating.
With such a variety of cards on offer, how are you supposed to figure out which is the right one for you?
In this article we’re going to compile a checklist to help you choose the most suitable credit card, so grab some paper and a pen and prepare to take notes!
What Do You Want the Card for?
There are two questions to ask yourself initially:
- Do I really need a credit card?
- What do I want the card for?
Make sure you actually need a credit card before making than financial commitment, and from here, the card you decide on will depend largely upon what you plan on using it for.
Let’s say, for example, you want to carry your balances over from month to month; in this case you’d opt for a card with a low interest rate. On the other hand, if you’re confident you can clear the balance every month without fail, a charge card might be more suitable.
You should also think about interest rates applied to things like balance transfers as this can often differ from the rates applied to purchases.
Annual Percentage Rate (APR)
APR is simply the amount of interest which is applied to any balances you carry over beyond your grace period, which we will explore in a moment.
Again, make sure you’re aware of not just the APR as a whole but also how it may vary when applied to different things such as purchases and balance transfers; this can sometimes make or break the suitability of a card to your needs, so you should be very mindful of this.
Grace periods are simple enough to understand; they refer to the time you’ll be given each month to pay off your balance in full before any interest or fees are applied.
The most common grace period is around one month but this can vary so be sure to check this with your lender before signing on the dotted line.
Most of you are probably familiar with what a credit limit is, but there is a great deal of variance from lender to lender, and this can also be affected considerably by your credit score. This is why less solvent individuals are only able to gain access to limits of a few hundred dollars.
Make sure you maintain a full awareness of overlimit fees, which are the charges incurred when you spend beyond your credit limit. Some lenders with high overlimit fees will offer benefits in other areas, so be sure to weigh up the cost/benefit ratio and make sure you aren’t lumped with excessive hidden costs.
It’s best not to expect too much from your credit limit if this is to be your first credit card, but by settling your balance on time consistently, you’ll very quickly be able to up your limit to make larger purchases.
If all else fails and you’re still not sure where to find the best deal on a credit card, it’s always worth checking out one of the many comparison sites on the Web.
Pages such as CardRatings.com and Credit.com enable you to make a fair and objective analysis of each lender and the range of options they offer, and at the very least, this can be a great way of confirming your own decision before acting on it and signing up for a card.