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How to Pick a Credit Card

February 14th, 2008

* * * * ½ 4 Stars

Nonstop, we are sent different offers for credit cards, whether online or in the mail. Each of these offers claims to be the best offer out there. “Zero percent APR! No sign up fee!” Frankly, getting confused and not knowing what to do with all of these offers is a very common feeling. With so many offers coming our way, how do we know that the one we chose is really the one that we should have? Furthermore, is this credit card going to help us or is it a dangerous move for us to make that will just dig us deeper and deeper into economic doom? There are a few things to look out for when considering a credit card.

The Interest Rates

First and foremost, consider the interest rate. Often times, the credit card says that they have a 0% APR. That means that they have no interest. That’s fantastic…Except for one small detail: that’s probably just the introductory rate. Ensure that you read the terms and conditions (the fine print). This rate is only for a short period of time before it increases to the prime rate or slightly above that rate.If you do find a credit card with 0% APR, try and see if you can’t get one that has a 0% transfer rate so you can get the balance from a high interest credit card over to this no-interest credit card. That can be saving grace for your pocket and debt. But remember…The 0% APR on balance transfer would just be an introductory rate. Pay back the balance because the true interest will suddenly appear.

Rewards Cards

If you are like most people and want to try and get something back for your use of a credit card, look into getting a rewards card. These are cards that the companies provide that earn you different rewards. Some of these rewards could be anything from miles on an airplane to gift cards to stays in hotels to anything else really. The credit card company is the one that decides really just what they want to offer. They offer points on every dollar you spend and that really is a great thing.

Annual Fees

However, keep your eye on the annual fee. If you’re not using the card all that much then paying whatever annual fee they have might actually cost you more than you’re receiving in rewards. A rewards card is good for the person that is going to use it a lot and pay back the balance before the end of the month. That’s the best way to reap the benefits of a rewards card. Finally, check the fine print on when the rewards becomes invalid. They aren’t yours forever…You have to use them in a certain amount of time.

What does it come down to?

In the end, you want to pick the kind of card that is going to suit you the most. Bad at paying back your balance? Get a low interest credit card. But remember that the 0% APR is not forever. Good at paying back your balance and want to earn some rewards in the process? Go with a slightly higher interest card, but with some nice rewards. It’s all up to you, but pick the one that suits you best.