Credit cards have more become of an importance these days. It doesn’t matter whether you have a big bank balance or not, if you own a credit card, you have enough spending ability. But a fact of life is, everything that comes with pros has some cons as well. In a good way, credit cards can be really helpful when someone is in need but the excess of anything can result to be harmful.
In the present scenario, there are a lot of companies providing credit cards with some really eye-catching offers and schemes. In short, a credit card is something of an importance for these companies to sell their product to dig a hole in customer’s pocket with their fancy schemes. With those offers, it’s a way of increasing the spending the capabilities of the consumer.
Finding the right credit card is not as easy as it seems, it’s a skill to find the right fit, which involves a good research and brain warming. Landing up for a credit card requires your perfect research for it.
No single credit card is better than all others in all categories — or for all people. But by understanding your options and understanding the requirements, you can find the card that’s the best fit for your spending attributes and the credit situation.
Out there, are a lot of different types of cards – from balance transfers to rewards and beyond, it can be hard to distinguish them apart.
So here goes a checklist, before choosing a credit card that is just right for you:
1.Type of credit card you need
There are basically three types of credit cards available in the market:
- Cards through which you earn rewards
- Cards through which you save money on interest
- Cards through which you can get credit when you are limited on money
The right credit card is the one with the features designed to meet your specific needs based upon your spending ability and requirements. Let’s put it forward with an example if you don’t travel much, then the best travel card in the world isn’t going to do you a lot of good.
The first question that pop-ups in the mind when credit card comes in the picture is how you intend to use it.
Are you the one, who is going to use it regularly to pay for everything, or just getting it in case of emergencies as a backup option when you run short of money?
If it is going to be your go-to-card for most of your purchases, then look for a card with a lavish credit limit and a rock-hard rewards program.
And if it’s only going to be used as your backup option, go for a card without an annual fee that too with a low-interest rate.
For general usage, go for a card with the lowest possible interest rate and a low introductory rate.
- Interest Rate
Before getting a credit card, get the perfect knowledge about the interest rate that mostly appears as the Annual Percentage Rate (APR). It can either be fixed or variable rate. If you opt for a fixed-rate card, you know what the rate will be from month to month, and if you opt for the variable-rate card, it can fluctuate.
- Credit Limit
What is the amount of money you want the credit card issuer to let you borrow? It depends on your credit history, it could be anything as per your spending ability. It’s natural that you don’t want to face a situation in which you’re close to exceeding out your credit limit.
It can harm your credit score, based upon that there have been cases where credit card issuers have cut down the credit limits of the customers to an amount that’s lower than their current account balance. Also, exceeding the limit leads to penalty also.
- Fees and Penalty
There’s a lot of ways, tantrums for credit card issuer to make money off you. You have to be really smart to tackle them, they commonly charge fees for transactions, such as balance transfers and cash advances, or for asking to increase your credit limit or make a payment by phone. They also charge for penalty charges for paying your bill late or going over your credit limit (they don’t decline your card; they just sock you with a fee for it).
You must look for cards that have reasonable annual fees, on balance transfers, it must not charge you for the transaction fees and there must be zero percent rate of interest for at least 12 months. You must not pay extra for their so-called reward programs, it is another way of digging a hole in the customer’s pocket showing some fancy offers which let user spend more than his spending ability in lieu to avail those offers.
While choosing the credit card for you, look for the best one, as there are plenty of them who don’t charge extra for them.
- Billing Cycle
Whatever good amount you are borrowing from the credit card issuer, you have to pay that right back, you must be very well aware of it. You must have all the knowledge about how the finance charge is calculated. The easiest method to get that done is to add up daily balances and then dividing it by the number of days in the billing cycle.
Also, beware of them, some of them play real smart and compute balance using two billing cycles.
Beware of credit card issuers that compute the balance using two billing cycles, it will end up costing you more money in financing fees.
You have to get that straight that fancy things won’t come easy as they seem at first. Hence they will try to grab your attention throwing a pool of offers in front of you to grab on. The core motive behind these offers is to induce you to use their credit card. And you need to be careful about choosing the right one for you. You must look for offers that give flexibility and rewards that you’ll be actually benefitted from.
So, now that you’ve explored the best fit credit card for all your needs. What’s next?
Making the best choice for the credit card is an important decision, but your research doesn’t stop there. You must make use of your card to get the most of your money.
Just make the best choice for yourself, whichever credit card you choose, it must help you achieve your financial goals in the most affordable, efficient possible way, whether you’re trying to build credit, borrow money or earn rewards.
Settle for the best, leave the rest!