How To Choose A Credit Card

Choosing the right credit card, experts say, can be just as important as finding the right auto loan or even the right mortgage. The money that you can potentially borrow with a credit card over time can easily exceed the amount you paid for your last car and can approach the amount you took out for your mortgage - so it makes perfect sense that you should take your time when choosing the right credit card.

Many people simply look for the lowest interest rate when choosing a card, and while a low interest rate can be important for many credit users, there can be more important considerations for some users.

For example, if you routinely pay off your credit balance each and every month and carry no balance forward, then the interest rate that your card carries is of no concern to you. What would be of great concern to you, however, is the grace period - the number of days between the time you purchase an item and the time that your card begins charging you interest. If your balance is paid in full each month, and it is paid within the grace period, it is quite possible to use a credit card for years without once paying a penny in interest.

If you normally carry a small balance from month to month then the interest rate on the card you choose becomes more important - and the importance increases with the size of the balance you generally carry.

There are other considerations beside the interest rate that you may wish to consider when choosing a credit card. If you use ATMs frequently then check carefully for the ATM fees that a card has, because excessive ATM fees is where many banks make a large portion of their income. Some cards also have a yearly fee.

What are the late fees if you miss a payment? Is there a monthly “transaction” fee or other similar fees? Monthly “transaction fees” can quickly destroy any other savings that you think a card is providing for you. Does the card you are considering have other types of fees that could apply to the way that you typically use your card?

Perhaps you frequently rent a car and a card with free rental insurance would be most valuable to you. Perhaps you feel that bonus points based on your monthly purchases are something you could use, or perhaps you need frequent flyer miles or another similar perk.

Once you have determined how you normally use your card and what types of fees will be most costly for your particular lifestyle and your particular financial situation — plus which perks would be most useful for you - then it’s time for you to compare as many cards as possible, side by side so that you can assess each and every feature to find that one card which is a perfect fit for YOU.

To do that you need a website that lets you quickly and easily skim through hundreds of credit cards and lets you see the good points as well as the bad points of each card. Only in that way can you ever hope to find your perfect plastic match.