If you are shopping around for a new credit card, you may be wondering how do I pick one that is right for me. After all, there are so many options available that it can be overwhelming. There are however, a few basic things to consider before making your choice. Mainly you have to consider what your needs and spending habits will be with your new card.
The first question you need to ask yourself is how do I plan to use the credit card? This question is important, because certain cards will make more sense, depending on how you plan to use them. For example are you planning to pay off your balance every month? If you said yes, are you positive you are being realistic about this expectation? If so, then you are someone who may not really need to look at things like APR’s and other fees, because they simply won’t affect you.
If however, you plan to carry a balance or are very likely to carry a balance, then you will want to pay close attention to how interest will be compounded on your debt. To begin with you will want to check the APR. Look for a card with a low rate, preferably a low fixed rate.
Are you looking to transfer a balance from another card that you need to pay off? If this is you, spend some time looking for a balance transfer card that either offers a good introduction APR like 0% interest for several months or one that has a lower, locked in interest rate. Be careful if choosing a low start up rate. Check to see what the terms are and what your rate will jump to after the promotion time period ends. Sometimes these cards, if you can’t pay the balance off before the end of the promotional period, turn out to not be cost effective.
Are you looking for particular features and benefits from a credit card? Like getting a card that has a rewards program for example? If this is you, there are an abundance of options available. You can earn everything from dining certificates to free travel to cold hard cash. Shop around and pick one that fits your needs. Just be careful to check card terms and make sure they fit your needs before signing up.
In picking a credit card that is right for you there are other things that you should also consider. You will want to check all the fine print. Some cards charge annual fees that you will have to pay each year. If you are looking to use your card to transfer a balance there will most likely be a balance transfer fee. Almost all cards also charge fees for using your card to get cash. Some credit card companies today are even imposing fees to their customers for inactivity. If you don’t use your card enough or don’t charge enough on your account during a certain time period they will charge you a set fee.
Before applying for a card you will also want to know what your credit score is and what cards you will qualify for. In today’s economy it can be more challenging to get credit, unlike times in the past. If you have poor credit you may have to look into building your credit before you are able to get the credit care you truly want.
No matter what card you choose, remember that with a credit card comes responsibility. When you are issued a credit card you should always use it wisely. Proper use will ensure that the credit card company is reporting you in good standing to the credit bureaus each month. Using your credit card carelessly can hurt your credit.
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