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Titled: Credit Cards: What to Compare
Credit Cards: What to Compare
Article Summary: Credit card offers are everywhere and all claim to out do each other. How do you cut through the marketing talk and understand the key features you need to compare to make an informed decision. Find out with this informative article on credit card comparison.
How do you know what credit card to choose when there are so many credit cards available? It can take ages to trawl through all the banks websites or to call them up and get offers explained. The power of the internet now means there are a number of websites that allow you to quickly and easily compare offers side by side. So what do you need to look out for and what do all the terms mean?
Intro APR: This is the introductory interest rate. Check if the rate applies to balance transfers from other cards only or on new purchases as well. Before you apply then make sure you know how long any introductory offers last, what fees apply and what rate will be payable once the offer has ended. To prevent people making too many transfers many credit card companies are now charging a percentage based fee for balance transfers.
Standard APR: This APR is the annual rate of interest payable for new purchases. If you know that you will pay your bill in full each month then the interest rate may not be an issue but if you don't pay your bills in full each month then you should consider a low interest credit card.
Interest Free Period / Grace Period: This is the number of days you get interest free on new purchases. This period is normally described in the form of 'up to' a number of days, for example,'up to 55 days'. The reason it says 'up to' is because they show the maximum number of days you can get interest free. The length of time stated refers to the first day of your billing cycle through to the day your monthly credit card bill is due. Therefore if you purchase something near the end of your billing month you may get far less time interest free. There are a few cards with no interest free periods. Avoid these cards like the plague as you will already be paying interest by the time your monthly bill arrives.
Cash Advance Rate: Credit cards offer the convenience of accessing cash through a cash advance. Be warned, the luxury of having instant access to money normally comes at a high cost in the form of very high interest rates and fees. On top of this you may have to pay a few dollars for an ATM fee and interest is normally calulated from the day you take the money out. Unless you have a card designed for low cost cash advances they are best left for emergencies only.
Annual Fee: Many cards now charge no annual fee but if you want more rewards or benefits then an annual card fee may apply. Make sure you are aware of any annual fees before you apply and do a rough estimate to work out if the value of rewards or interest saved will outweigh the cost of the annual fee.
Rewards: Rewards credit cards are becoming increasing popular and rewards come in many different forms such as points for a gift catalogue or frequent flyer points through to cash-back on your monthly bill. By paying for most of your day to day expenses and major purchases through a rewards credit card it is possible to earn some worthwhile rewards but don't cut caught up in earning rewards. Never buy something just to boost your rewards as the value of the rewards you get back is only ever a fraction of what you spend. Also, you will be paying interest every month if you don't pay your bill in full and on time each month. If this sounds like you then you could benefit the most from a low rate credit card and do without the rewards. Most people will find that you save far more in interest than you would have earn't in rewards points.
Credit Required: Think about the credit rating of the cards you apply for. For example Gold or Platinum credit cards are clearly positioned for those seeking a high credit limit and have the income to justify this. If you're on a low income and apply for such a card you will almost certainly get rejected and your credit rating will be damaged further.
Now you know what you are comparing you can make an informed credit card comparison and find the best credit card for your needs.
Article Source: http://www.upublish.info
About the Author:
Richard Greenwood
This article on credit card comparison is by Richard Greenwood, director of click4credit.com.au a website dedicated to helping consumers find the best card offers including Visa credit cards.
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