Today, hundreds of credit cards are available in the market. Each of them has its advantages over the others, so choosing one that’s right for you is quite complex and confusing.
Before you rush into applying for a credit card, you must first create a checklist that will serve as a guide for your credit card shopping. Below are the things that you should consider and include in your checklist.
The Minimum Repayment
The minimum repayment of a credit card is the amount you will need to pay if you cannot pay off the balance each month.
The minimum amount you will have to pay will depend on two factors: the amount you owe and the credit card policy. The amount is usually set to 1-3% of the total amount you owe, including several fees such as the interest rate and late payment fee.
You should check what credit card offers the lowest minimum repayment to ensure that you will only pay a small amount if you fail to pay off your balance.
The Annual Percentage Rate or APR
The next thing you must include in your checklist is the credit card’s annual percentage rate. By understanding credit card APR, you will know which one is the best for you.
The APR is the cost you will need to pay using your credit card if you couldn’t pay the whole balance every month. Compare the APRs of all the credit cards to see which card has the lowest APR. If you are looking into credit card consolidation the APR should be around 18.56% only and not more.
Points and Rewards
Credit cards also have their respective points and rewards system for their loyal credit card users, which you should also look into. These points will build up when you use your credit card and can then be used to pay for goods you intend to buy. The points you acquire will depend on the amount you spent using your card.
It is best to think of where you are planning to use these points and rewards to check if a particular credit card gives you the option of using the points you acquired into spending on the things you prefer such as travel, gift cards and many more. Some credit card points or rewards might be used on one particular shop while other cards won’t, and this is one you should consider.
Cash Back Program
Credit cards also offer a cashback program for their loyal customers. They will refund some of your money to your card. The refund amount will depend on the amount you have spent using the credit card.
You need to check before you apply for a credit card if you qualify for the cashback program. For instance, credit card companies only give a cashback program to customers who paid their balance every month.
Interest Rates
Another vital thing to consider is the credit card’s interest rate. You do not want to apply for a credit card with the highest interest rate in the market, which is why you must compare all the interest rates and choose the lowest.
Additionally, it would be best if you also looked into the credit card’s introductory interest rate. An introductory interest rate is the initial interest rate that is offered to you by the credit card company as a welcome deal. In your first six months, you will be paying a lower interest rate than the regular rate imposed by the credit card company or even none at all.
Other Credit Card Charges
Check the credit card agreement and check if they impose other charges when using their service. It is best to do this before you sign up for any agreement or contract so that you will not end up getting stuck with a credit card agreement that has a lot of fees charged against you.
The usual charges a credit card imposed on its holders are the interest rate, charge for going beyond your credit limit, late payment fees, and charges if you use the card outside your country. You must check the agreement and look for any charges other than the ones mentioned.
How to Properly Compare Credit Cards?
After you are done with your checklist, the next thing you must do is to compare all the credit cards you are considering. When doing your checklist, you must also write down all the information you acquired from your credit card shopping.
Once you get all the details, you can now compare them side by side to have a clear view of what each credit card can offer you. Another way to compare credit card deals is to use a credit card comparison website. This is the easiest way to compare as the website will do all the tricks for you.
Choose Wisely
Now that you have already created your checklist, you can now choose the best credit card based on your needs and capability. You must choose wisely and apply for a credit card to provide you with great benefits.