The following is a guest post.
Credit cards and chainsaws have a few things in common. Both can be very handy tools, but they can also inflict some severe damage if you use either tool incorrectly. The same advice applies to both. Be sure that you choose the proper tool for the job and follow all safety precautions. Here are a few things to consider when you’re trying to find a credit card that works for you.
Your Spending Habits
Your spending habits are the most important factor to consider when searching for a new card. Will you pay off your charges in full every month or will you carry a balance?
If you will likely carry a balance from month to month, search for a credit card with a low introductory rate and low monthly interest rates. If you plan on paying off the balance in full every month, choose a credit card with no annual fee.
Will you use the card only for emergencies, for daily purchases or for balance transfers? If you’ll be making daily purchases, try to find a credit card that offers a great rewards program with a high credit limit.
Choose a no-frills credit card with low fees and interest rates if you’ll only be using it in emergency situations. If you plan on using the card to make balance transfers, a credit card with a low fixed transfer fee and a low interest rate is undoubtedly your best bet.
Credit card companies frequently offer great rewards programs to tempt you to use your cards. This can work to your advantage if you’ll be making the purchases anyway.
If you like to travel, find a card that offers travel perks such as airline miles or reduced hotel rates. If you use credit cards to fill up at the pump, try to find one that offers cash back on gas purchases or rewards on car expenses.
Make sure that the credit card you choose doesn’t charge an extra fee for the rewards program. Some programs come with restrictions, so read the fine print for any requirements and limits on the rewards.
The annual percentage rate, or APR, refers to the interest rate applied to any balance carried beyond the card’s grace period. The higher the APR, the higher your finance charges will be.
If you plan to make a major purchase, look for a new card that offers zero or very low introductory APR. Make certain that you know how long this special introductory period lasts and try to pay off the entire balance before the deadline rolls around.
Most credit cards have different APRs for purchases, cash advances and balance transfers. Make sure that you know the APR for each type of transaction before using your new card.
Fees and Penalties
Review the various fees and penalties listed in the disclosures. Some cards charge monthly maintenance fees, activation fees, late fees or annual fees. Other credit card companies might charge you a hefty over the limit fee or balance transfer fees.
Choose a credit card that offers you the lowest amount of fees for your intended usage. Find out the penalty rates and be sure that you know what triggers these fees so that you can avoid additional charges.
There are a wide variety of credit cards available to consumers. Take the time to consider the above factors and determine what’s important to you.