Credit cards are a handy tool in our day to day expenditures. With so many options to choose from, you can get lost the vast varieties and unproven qualities used in marketing different cards. Before making this major decision, take a step back, take your time and do a thorough research. Getting in depth knowledge on how credit cards work will enable you make a sound choice and meet your financial needs.
Here are some of the main factors to put into consideration
Penalties and Fees
The cost of keeping a card can weigh you down as credit card issuers never run out of ways to make money from you. Common charges found include transaction fees, especially for balance transfers, fees to increase your credit limit, annual fees and foreign transaction fees. Penalties are charged when you exceed your credit limit or pay your bill late.
Look for a card with low or no transaction fees. Cards with annual fees offer better rewards but there are also numerous options that do not charge this. In addition, get a card that does not require extra payments for reward programs. This is very crucial before accepting a credit card.
In all credit card offers, this is the annual percentage rate (APR), which either can be fixed or variable. It is especially important if you do not pay your monthly bill on time and carry balances. Most card issuers offer a low APR for up to a year after acquiring the card. This can however be revoked if you default on a single payment during this period. Ensure you pay your bills on time to keep your APR as low as possible and increase your grace period (the time between purchase and when interest begins to accrue).
Your day to day expenditures earn you points that on accumulation, can be used for travel, purchases and cash returns. Apply for a card that give you more points for frequent and high cost purchases. The rewards should also be easy to earn and redeem. Keep in mind that most of these
incentives have restrictions. Make inquiries so as to get cards with the least limitations and logical conditions.
This is the maximum amount the credit issuer can allow you to borrow. It majorly relies on your credit score. Depending on your expenditures,
choose a credit limit that will allow you make all your purchases comfortably. Almost or actually maxing out on your credit limit affects your credit score and may lead to extra charges. Your credit limit may also be reduced.
Owning a credit card has numerous advantages. These include:
- Discounts on purchases made from specific merchants or on specific goods. These manufacturers or merchants form agreements with the card issuers to make this possible.
- Additional coverage on damage or loss of items purchased by the credit card through extended warranties.
- You can get free services. These vary depending on the card issuers. They include insurance, protection from fraud and delivery of goods.
- Some cards have no annual fees hence reduce your payments.
- Rewards for use of the credit cards can reduce your expenditures. Most common rewards are free air travel, cash or free purchases of specific products.
After extensive research and comparison of different offers, personally check with customer care services to erase doubts and get details on information you have gathered. More information on credit cards can be found at https://aaacreditguide.com/credit-cards-for-good-credit/ .With these factors to keep in mind, finding the best credit card for your individual needs will be an easy process.