Choosing A Credit Card What Factors Are Important? Choosing the right credit card is solely dependent on your spending habits and creditworthiness. You can actually save up a lot of money every year by just choosing the right card. Consequently, identifying the best cards and managing your credit card responsibly can be overwhelming. But there’s nothing to worry about.
Also, there are credit card offers everywhere, in mailboxes, on the Internet, and in stores. Before making any choice of getting a credit card check all the needed information to be sure it is an ideal card for you.
Type of Credit Card
There are various types of credit cards to choose from ranging from regular credit cards, rewards credit cards, and student credit cards. Just understand the type of card you are applying for Before filling out the application form.
Annual Percentage Rate
This is the annual rate or known as APR. It is the percentage that is applied to an account balance that you have carried beyond the grace period given. The higher the APR the higher your finance charge WI be when you have a revolving balance and the more you’ll pay for using your card. Some credit card has different APR for purchases, balance transfers, and cash advance. Ensure that you know the APR for any card that you choose.
Grace Period
The grace period is the period of time that you have to pay up your balance in full before a finance charge is added to your account. The period is always charged from the billing date. That is 28 days from the billing date. Some credit card issuers give longer grace periods of up to 56 days.
The longer grace period is more preferable because you have more time to pay your bill without having to incur a cost for the convenience of using a credit card. If you already have a balance on the credit card, New purchases may not attract a grace period.
Fees
However, the mist credit card comes with a lot of fees such as annual fees, late fees, over-the-limit fees, balance transfer fees, cash transfer fees, foreign transaction fees, and promotional period or introductory offers, minimum payment. Cardholders charge fees for making a payment on your account over the phone on the due date, requesting additional copies of your statement, or returning checks, and many more.
Finance Charge Calculation
Credit card company has different methods of calculating the finance charge. Some methods consider only the current month’s balance while others consider the current and previous months’ balances. A new purchase may or may not be included in the calculation.
Credit Limit
The credit limit affects your purchasing power. If you are a new cardholder, it is wise you start out with a low credit limit to become acquainted with responsible credit card habits. As a first-time cardholder beware of no-limit credit cards. Because this make gives a wrong impression on your credit score. Although some financial situation allows a higher credit limit.
Explore cardholders protection
Endeavor to check if the credit card offers personal, shopping, and travel protections for cardholders. This may not seem like a big deal at the present time. But you could be denied insurance coverage on your next Car rental or out of that costly extended store warranty when purchasing your next products.
Assess the Qualification Criteria
Once you have made your choice on your ideal credit card, the next step is to consider if you are qualified for the credit card. Most credit card issuers have pre-qualification screening tools on their website. Inquiries do not impact your credit score so simply submit your personal details for the test.