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If you're considering applying for a new credit card, these days you're spoiled for choice. There are thousands of different credit cards on the market, and they offer a bewildering variety of terms, offers and incentives. So how do you choose the one that is best for you?
One key fact to grasp is that there is no single "best" credit card for everybody. Different cards suit different purposes. Your aim should be to pick a card that fits your circumstances and will meet your current financial needs.
If you are currently paying interest on credit or store cards, for example, you need a credit card that offers 0% interest on balance transfers for up to 12 months. You can then transfer the debts from your other cards to your interest-free card, and aim to pay off the balance before the end of the interest-free period.
If you don't have any outstanding debts, you could choose a card that offers 0% interest on spending for an introductory period (again, cards offering up to 12 months are available). Put all your everyday spending on the card during this period, and put the money you would otherwise have spent into a high-interest savings account. At the end of the introductory period, pay off the balance on the card and pocket the interest you have earned. Note, however, that you will still have to make the minimum repayments required by your card issuer during the introductory period.
You could also opt for a card offering cashback. This is a popular incentive offered by many credit card companies. It means that for every dollar you spend, your card issuer will give you back a small amount, usually in a single payment made once a year. The amount returned is calculated as a percentage of your total spending, and typically ranges from 0.5% to 2%. Some card companies pay higher rates of up to 5% for purchases in certain categories (e.g. gas or groceries) or made through specific retailers. In a year you can earn hundreds of dollars in rebates, but always pay off your balance at the end of each month, or interest charges will wipe out your cashback benefits.
Finally, if you need to borrow over a long period at a low interest rate, consider obtaining a lifetime balance transfer card. With rates as low as 5.94% APR, they are as cheap as the best personal loans, but you choose how long you take to repay your debt.
Having decided on the kind of card you want, take time to study the market and see what is available. Don't just fill in and return the next credit card application form you receive in the mail. Credit card comparison sites can make this easier for you by listing all current card offers for you to choose from, and also have a range of articles offering independent advice and information. |
| Author: Nick Davis |
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Author Bio:
Nick Davis writes for www.finest-credit-cards.com , which aims to match you up with the ideal credit card to suit your situation. The site has an entire section devoted to sports credit cards . |
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