Choosing a credit card isn’t easy because every credit card is
different. Some have higher interest rates, but others may offer better
rewards. It’s not as easy as going to a credit company and taking their
card. Before you decide which card to use, you should spend time
searching through different companies for the best credit card for you.
There are many important factors for you to review before choosing your
card.
The Credit Limit
It’s important to take note of the credit limits before you get a credit
card. A credit limit is a limit imposed on your purchasing ability with
a card. You can’t purchase more than the credit limit. Credit cards
have different credit limits, and it’s better to choose one that’s
lower. A lower credit limit stops you from overspending. This can be
especially helpful when you’re just starting to use credit cards. Once
you learn how to use credit cards properly, you can start applying for
cards with higher credit limits.
Grace Period
The grace period is a period of time after the due date in which you are
allowed to pay your balance without incurring any additional fees. If
you do pay after the grace period, then late fees will be charged. A
credit card with a longer grace period is better as it gives you more
time to pay.
Interest Rates
The interest rate is the amount you pay for the privilege of borrowing
money. Interest usually kicks in after the due date. The interest rate
is the most important factor when deciding for a credit card. The rule
is to pick a credit card that has a lower interest rate. Even small
differences in the interest rate can lead to a huge difference in the
actual amount of money you would be spending.
Rewards
Most credit cards offer rewards that can vary from cash back options to
rebates on gas. If used properly, credit cards can be better than cash
because of these rewards.
Why Are You Getting a Credit Card?
The first thing you have to consider when getting a credit card is the
reason you are doing so. By figuring out your reason, you could get a
credit card that would fit you. Why do you need a credit card? Are you
going to use it for your daily expenses, just like cash? Or are you
planning to go into a little debt now and then? Do you need the rewards?
Here are a few suggestions on what card you should get depending on
your reason for having a credit card:
- If you’re using the card for daily expenses, get a card with a longer grace period.
- If you plan to go into a small debt, choose a card with lower interest rates.
- If you do plan to pay the balance every month, get a card with cash back promos.
- If you travel by plane a lot, look for one that gives you extra frequent flyer miles.
- If you travel by car a lot, look for one that gives you rebates at gas stations.
- If you plan on buying online, choose a card that has good protection policies against fraud.
Choosing a credit card requires a lot of research. Read all the terms
that each company offers before making up your mind. Once you get your
card, use it properly. Even the best card would end up as a liability
when used unwisely.
