Get Up and Find a Credit Card
So you want a credit card. Who doesn’t? They increase your purchasing power, can get you a better credit score and they are good to have when an emergency comes up. However, when you are looking through that pile of preapproved cards you were just mailed, it can be hard to pick which ones you should apply to. Maybe applying for each one seems like a good idea, but this can actually hurt your credit score. Follow these helpful tips, and you will find the credit card of your dreams.
The Interest Rate
Look at all the different interest rates you have to pay. Most credit card offers show you a fairly low APR that may seem good, but that APR is only for purchases. Look deeper into the offer to find out what the interest rate is for late payments, cash advances and balance transfers.
Don’t only look at the numbers, but also find out how long they are active. You might get a great APR of 12%, but that may only last for the first 90 days. After that it jumps up to the not so good 30-35%. Check these numbers, otherwise you might have to pay a lot come the end of the month.
Reward Programs
Aside from their spending limit, one of the biggest differentiating aspects between credit cards is the rewards program. You want to have rewards for using that card, and the credit company offers the rewards program to keep you as a loyal customer.
Some cards have simple programs: spend $1, get 1 point. Get enough points, you can get airplane tickets, cash or other prizes. Others have more complex reward programs, like giving you back 10% of gas purchases or giving you 3 points for every $1 of food. Aside from points, find out the minimum and maximum values for the program. You may have to spend $1,000 in gas a month to get that 10% back, and most people couldn’t drive that much if they wanted.
Credit Limit
If this is your first credit card, or if you are trying to get a credit card with a poor credit score, then you might not get a huge credit limit at first. However, that doesn’t mean you shouldn’t check out the limit before applying. If you need $1,000 in credit, then applying for a $200-$300 credit card just isn’t going to do.
Since this figure is usually decided based on your credit score, you might not have any power over this, which is why the credit limit is important, but not quite as much as the other factors.
Annual Fee
Most modern credit cards have or are going to have an annual fee. It may seem absurd to spend money to use a financial device, but it is a common occurrence for most credit cards. A normal fee ranges between $20-$50 a year. However, there are some that go much higher than this, such as $100 and up. Unless the card has a huge limit and a lot of fancy extras, it’s best to stick with low annual fees.
Convenient Usage
Some credit cards have some very odd rules that limit their convenience and usefulness. For example, a restrictive credit card may only allow you to pay for charges in a store, but not online or over the phone. Unless you want the credit card to have a lot of security, it is normally best to get a card that can be used anywhere.
As technology has advanced, you will notice that most cards can be used everywhere. However, there are still some cards that can only be charged in certain ways. Be sure to read the terms to see how the credit card can be used.
Conclusion
Finding that perfect credit card doesn’t have to be difficult, you just have to read the fine print to see what you are really getting. Follow these guidelines, and you should soon have the credit card of your dreams.
