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Finding a Good Deal on Credit Cards
Today's cardholders are spoilt for choice when it comes to picking a card issuer. There is an extensive range of credit cards available, each with their own fees, APR rates and features. With so many options available it is a good idea to shop around to find a great deal and a credit card with features that are best suited to your needs.
When applying for a new credit card your first consideration should be your spending habits. If you are planning to keep the balance at a manageable level and have the means to pay off the debt in full each month look for cards with advantages such as having no annual fee. A longer grace period - the time limit the card issuer sets, dating from the issue of the statement, for the cardholder to pay off the balance in full before an interest charge is incurred - is also beneficial if your spending habits fall into this category.
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If you do not intend to pay off the full balance each month, or you plan to make expensive purchases on the card which would make clearing the debt within the grace period impractical, the main feature you will need to look at is APR. Typically, the lower the APR the less your repayments will be on your purchases, as less interest will be incurred. However, you should always read the small print carefully. For example, a single credit card may have several applicable APR rates. For instance cash advances may be charged at a higher APR than purchases. If the card has a special introductory APR it is imperative to ask what the APR will increase to after the introductory period expires as that great deal may quickly convert into a costly credit card.
When looking at APR you will also need to assess whether you would prefer a fixed or variable rate. A fixed rate means that the APR is unlikely to change throughout your time as a cardholder. Occasionally, circumstances may arise where the rate must be increased but the card issuer must inform you in writing first. A variable rate means that as interest rates rise, your card issuer is likely to raise the APR on the credit card. However, cardholders will benefit if interests rates drop. Ask the card issuer how frequently they would expect the APR to change.
If you are shopping for a new credit card then you should be clear about any fees attached to the card. Some credit card issuers charge an annual fee for the use of the card, although the issuer will often include special features as an incentive to sign up for their product. But there also fees for late payment, balance transfers, etc, to take into consideration as these fees will vary between issuers.
People who use their credit cards on a regular basis could benefit from comparing the special incentives offered by the cards. Common incentives include cash back on purchases, frequent flyer miles and extended warranties on items bought using your credit card. However, if you feel you are unlikely to need these benefits question whether the cost of the card - either in annual fees or the APR - justifies its use, or whether you may find a better deal elsewhere.
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