Everyone needs a credit card at some point during their lives. You need to find the best one for you and for your needs. There are many with a variety of perks and rewards, and some that are just plain credit cards with no perks. There is one out there that is best for you.
There are different ways to apply for new credit cards and many of them are online. You could always do a test to see which card is the best for you by applying at different places. Then you could choose the one with the best benefits for you.
This article will give you a little information about what to look for in a credit card. It will explain some terms for you so that you know what you are looking for. Hopefully, it will help you on your journey to find the correct card for you.
Why Shop Around?
You should shop around for the cost of the credit cards first of all. The costs could include the interest rates and any fees that go along with the cards. Some offer no annual fees and no maintenance fees but have a higher interest rate. Others offer small fees with lower interest rates. You would have to decide which is the better card for you.
Things to Do as You Shop for a Card
How Will You Use the Card?
Some people plan to pay their balances off each month, while others know that this is not possible for them. The reality is that most people do not pay off the balances each month, and this is okay. If you do not pay off your balances each month, look for a card with a lower interest rate and lower annual fees.
If you are one of the few people that do pay off their balances each month, you can look more into the rewards and perks that cards can offer and you can afford a slightly higher interest rate to do so. Since you are paying off your balance each month, the interest rate does not matter as much. Be careful to choose a card with rewards and perks that you will use.
Know What to Compare
There are terms that you will need to know in order to compare the credit cards that you might want to use. APR – this is the annual percentage rate, or interest rate, that you will pay. Some cards will give you a range that you might pay. You will need to determine if the highest rate listed will be affordable to you. Fees – there are many fees that are attached to a credit card and you will need to determine if you can afford them. These fees can include late payment fees, cash advance fees, and annual fees.
APR for Balance Transfers – there are some cards that offer a low introductory fee for balance transfers, but these fees go up after a small period of time. You will want to make sure that the APR after the introductory fee is still okay for you. Penalty APR – some banks will put penalties in effect for you for doing certain things. You will need to see what triggers these penalties and what the APR is for triggering them.
Ask for Better Deals
You will want to begin your search at the bank or credit union that you already have a relationship. This might allow you to have a card with lower interest rates and fees because of your relationship. If this does not work out for you because they cannot get the fees where you want them to be, then you can ask if they can match another offer that you have found to your liking. Sometimes banks and credit unions can do this, and other times, they cannot. If they cannot, then go for the better offer.
If you have seen more than one offer that fits your needs, compare all the fees with them before you apply. Applying for too many credit cards can lower your credit score.
Transfer Your Account with Care
There are usually fees that go along with transferring your credit cards to new ones. They might have a zero introductory fee but may charge up to five percent of your balance to actually make the transfer. Do not close your previous account too quickly, because you might find that the new one does not really meet your needs. You generally have ten days after they send you the terms and conditions of your new card to make changes.
Terms That You Should Know
APR – this is the annual percentage rate that you are charged, your interest rate. This is the cost of your credit. You want this to be as low as possible so that you are not paying too much.
Annual Fee – this is the fee that you pay annually, or yearly, to maintain your card. This fee can be zero or it can be one hundred dollars or higher. You also want this fee to be as inexpensive as you can find.
Balance – this is the amount that you have on your card each month and it includes your purchases, your interest, and any other fees that are owed. You need to keep this as low as possible so that you can pay it off each month in full. Doing so will help you to avoid interest fees and late payment fees.
Balance Transfer Fee – this is the fee that you will be charged to move your balance from an old card to a new card. Some banks do not charge anything for these fees, while others will charge as much as five percent of your transfer. You will want to make sure that you check these fees before you choose your next card.
Credit Limit – this is the maximum amount of money that you can charge on you card. Some cards, especially cards for beginners and those with bad credit, will have low credit limits. If you have an excellent credit record, you could get a card without a limit.
Grace Period – this is a period of time that you must pay of your monthly balance without having to pay interest fees. Almost every card will have a grace period for you to take advantage of. Pay off your balances on time each month to avoid any fees.
Penalty APR – this is the APR that you are charged for many reasons. This could include making a late payment or going over your limit. You want to avoid these penalties because they trigger a higher APR than you are used to and can make your payments higher.
You will need to look at all the things that are listed here when you are thinking about getting a new credit card. You will want one that has the least amount of money that is owed to you. Check for lower interest fees and annual fees.