Shopping for the Best Credit Card
In addition to looking at fees and the interest that you will be charged (also known as the annual percentage rate or APR), consider your lifestyle and past payment history when shopping for a credit card. Factors you may want to consider include:
• A fixed vs. a variable rate of interest. Most cards assess a variable rate, which can be reset monthly. In most cases, the rate of interest will not be less than a floor established by the card issuer.
• Minimum payment you are required to make.
• Maximum you can borrow without incurring an over-the-limit fee.
• Fees such as an annual fee, late payment charges, and interest rates on cash advances.
• Circumstances when the credit provider can change provisions of the agreement.
• How the company calculates the finance charge. Is it based on the average daily balance, the balance at the beginning of the billing cycle, or another amount?
• A low introductory interest rate, if offered (extensive lists of the latest low-interest-rate cards in the United States are available at www.bankrate.com and www.cardtrak.com). When is the rate likely to increase? What is the new rate likely to be?
• Incentives such as cash rebates on purchases, purchase protection, and frequent flyer miles.
• Your prior payment history. If you typically pay off your balance every month, the APR may be less of an issue than getting cash back with a purchase.
- 1• Starting Out: Begin Funding for Your Financial Security
- 2• Get Out From Under
- 3• What You Really Should Buy
- 4• Build a Cash Reserve
- 5• Shopping for the Best Credit Card
- 6• Build Your Financial Future
- 7• Stop Waiting for the Next Paycheck
Personal Finance - 5 Credit Card Traps You Should Know