One could consider a credit card as a very handy tool, however it can actually inflict so much damage when it’s being used in an improper way. For this reason, you should choose a credit card in a wise way. Below are some of the things that will help you on your selection.
Its Interest Rate
In a credit card offer, you will find the interest rates as APR or an Annual Percentage Rate. This can be a fixed rate or can be a variable rate which is being tied to another financial indicator, which is known commonly as prime rate. With a fixed rate card, you are going to know what is going to be the interest rates for each month and cards with variable rates tends to fluctuate. You should however be aware though that even cards with fixed interest rates can change due to certain triggers such as the card payment or cards which are late or if you will go over the limit. This could also be because the issuer of the credit card will decide on changing it.
Credit Limits
This actually is the amount of money to which the credit card issuer is going to be willing to let you borrow. They will base it with your credit history. You would not want to be in a situation to where you are close in maxing out the credit limit. This in fact can do some damage to the credit limits of customers towards an amount that’s lower than its current balance. Also, there’s a penalty when this will happen.
Its Penalties and Fees
There is in fact no shortage on ways on how a credit card issuer will make money from you. These common charges will include fees on the transactions like balance transfers and cash advance or in asking to increase your credit limit or by making payments through phone. There are in fact different penalty charges in paying your bill late or if you go over the credit limit.
See to it that you choose credit cards with reasonable fees. On its balance transfers, consider those that have no transaction fees and those that also have 0% interest rates for at least its 12 months. Also try to avoid paying extra on its reward programs.
Incentives
A lot of card issuers mostly offer a reward program that offers a reward program for customers so they will be included in using their card. You should try looking for programs that comes with flexibility like rewards and cash or travel which you can use and one which could be redeemed and earned easily.