Saturday, December 30, 2006
Which Credit Card Is The Best Deal For You?
Choosing a credit card is not a simple task. You need to consider what you are going to use the credit card for and only then you’ll be able to make up your mind. A credit card is a complex financial contract that provides the applicant with several different services you but not all of them have to necessarily be used.
Rate or Fees?
If you plan to pay off the balance each month and thus won't incur in any finance charges, a low interest rate is less important than finding a card with no annual fee, no or small transaction fees and any rewards program that you can use to your advantage (miles if you travel a lot, gas if you use your car often, etc.)
If you’ll carry part of the balance to the next month or you need to finance purchases due to not having a steady income, a long grace period, a low interest rate and a balance calculation method that minimizes your finance charges is what you need. There are many credit cards that offer this kind of services, you just need to look for them.
Reducing Costs
All credit cards will cost you money to use, but depending on the terms and conditions, some are more expensive than others. When considering a credit card offer, check these factors:
It's important to know how an interest rate is calculated. A fixed rate will stay the same over time, but a variable interest will rise with the prime rate. It can be low today but rise every month. Be sure to determine what the interest rates are for different charges, such as balance transfers, cash advances and purchases.
You’ll also need to understand how the outstanding balance is calculated to determine the finance charge. Make sure to know how many days in the billing cycle you have to pay off the balance before you are hit with a finance charge. This varies from one credit card to another and can really make a difference.
Some cards charge an annual fee, which you may or may not be willing to pay. If the card has a lower interest than other others, it may be worth it. Otherwise, try to get the credit card with the lowest annual fee or no annual fee at all if possible. It makes no sense paying for something that you can get for free.
Even if you always pay your bills on time, be sure to find out about the card's late fees, over-limit fees and any other penalties you may incur when using the card. You never know what may happen in the future and such fees can raise your debt significantly if they are too excessive. Be sure to read the fine print. Credit card companies must disclose interest rates and fees, but some fees are buried deep in your user agreement.
Rate or Fees?
If you plan to pay off the balance each month and thus won't incur in any finance charges, a low interest rate is less important than finding a card with no annual fee, no or small transaction fees and any rewards program that you can use to your advantage (miles if you travel a lot, gas if you use your car often, etc.)
If you’ll carry part of the balance to the next month or you need to finance purchases due to not having a steady income, a long grace period, a low interest rate and a balance calculation method that minimizes your finance charges is what you need. There are many credit cards that offer this kind of services, you just need to look for them.
Reducing Costs
All credit cards will cost you money to use, but depending on the terms and conditions, some are more expensive than others. When considering a credit card offer, check these factors:
It's important to know how an interest rate is calculated. A fixed rate will stay the same over time, but a variable interest will rise with the prime rate. It can be low today but rise every month. Be sure to determine what the interest rates are for different charges, such as balance transfers, cash advances and purchases.
You’ll also need to understand how the outstanding balance is calculated to determine the finance charge. Make sure to know how many days in the billing cycle you have to pay off the balance before you are hit with a finance charge. This varies from one credit card to another and can really make a difference.
Some cards charge an annual fee, which you may or may not be willing to pay. If the card has a lower interest than other others, it may be worth it. Otherwise, try to get the credit card with the lowest annual fee or no annual fee at all if possible. It makes no sense paying for something that you can get for free.
Even if you always pay your bills on time, be sure to find out about the card's late fees, over-limit fees and any other penalties you may incur when using the card. You never know what may happen in the future and such fees can raise your debt significantly if they are too excessive. Be sure to read the fine print. Credit card companies must disclose interest rates and fees, but some fees are buried deep in your user agreement.
# posted by Medical Information : 1:47 AM
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