Whether you’re seeking to obtain your first credit card or your 5th, it’s important that you take the time to choose the right one. There are literally hundreds of different types of credit cards available for qualified consumers to choose from, all of which contain their own unique features.
First and foremost, you must identify you intentions with owning a credit card. Most responsible individuals use them to purchase items on the fly without having to carry around loads of cash. On the other hand, some people see to obtain new credit cards so they can transfer the balance of other, higher interest cards. If you’re wanting to transfer and consolidate some of your balances, then you’ll want a card with an attractive transfer rate. The rates vary depending on the terms and specifics of each card, but a good rate to look for would be around 3 to 4%.
Even if you plan on paying off the balance of at the end of the month, you should still look for a credit card with a low Annual Percentage Rate (APR). In short, this is the interest tacked on to any unpaid balance from month to month. A credit card with a 20% APR and a $10,000 balance would draw around $2,000 in interest fees per year. Although, if you were able get a card with a 10% APR, you would essentially save $1,000 per year.
Most credit cards have a few different types of APRs associated with them. The most common APR is for purchases made using your card, which is quite possibly the most important feature to look for in a credit card. However, the APR is likely higher for any cash advances used with your credit card. Some providers offer the card holder the ability to get cash back when making purchases. If you take advantage of this offer, you can expect a higher interest rate associated with this money.
Something that’s oftentimes overlooked by consumers seeking a credit card is the rewards program. With no strings attached, using your card as usual can grant you anywhere from between 1 to 5% cash back or other forms of rewards. For instance, if you own a reward credit card with a 5% cash back system and make $10,000 worth of purchases in a year, that’s an attractive $500 in your pocket for using your card as you normally would.
The last thing you want to look for in a credit card is the length of time you have to pay off your monthly bill, also known as the grace period. Some of the more flexible card providers offer grace periods of 4 weeks or longer. Hopefully you don’t wait around for nearly a month to pay your bill, but this extra time will come in handy in the event that your bill or card becomes lost.