Which Credit Card is Right for You? – 5 Things to Consider Before Choosing

Monday, July 30th, 2012 - Business & Finance

Which Credit Card is Right for You? – 5 Things to Consider Before Choosing

A credit card can be a great financial tool to have in your wallet. However, you need to remember that a credit card is nothing more than a short-term loan. Understanding the terms of each card that you look at will help you pick a card that will best suit your needs. What exactly should you be looking for when choosing a credit card?

Interest Rate

The most important aspect of a credit card is the interest rate that it carries. The average credit card will have an interest rate around 15 percent. This doesn’t mean that you have to pay that much. Those who have good credit could get a credit card with an interest rate of 10 percent or lower. Make sure that you don’t pick a card until you find one with an interest rate that matches your credit score.

5 Things to Consider Before ChoosingAre There Any Perks That Go With It

What kind of perks does your card offer? Look for a card that offers such perks as cash back at the end of the month. Many credit card companies will offer discounts on gas, shopping and other local attractions. You can also accumulate points that are good for airline miles and other attractive rewards. If your card does not offer any perks, you might want to consider finding one that does.

What Are The Consequences Of Paying Later

Think about the late fees and penalties that come with a late payment. Some credit cards allow you a grace period before any penalties are applied. You may even be forgiven for having one or two late payments each year. However, some credit card companies will tack on a $35 late fee for being even a few hours late with your payment. You want a card that gives you flexibility when you forget to pay on time.

Where Is The Card Accepted

Choose a card that is accepted in many different locations. Your card isn’t going to do you any good if you cannot use it. Certain brands are well known throughout the world and are accepted no matter where you are. On the other hand, a card issued by your local bank may not be accepted in many places outside of your community.

What Protections Does It Offer Me

Your credit card may offer your extra insurance protection when you rent a car. It may even offer you certain protections when you use it to book a hotel room or a flight. Check to see if there is any insurance coverage provided by your credit card company when you use a card to make a purchase. You also want to see if you are responsible for making any payments that are due to fraudulent purchases.

Getting a credit card is a great way to build up your credit history while giving you an extra source of funds for an emergency. However, you credit card isn’t worth anything if it isn’t accepted anywhere. If you are not protected against fraud, you need to look for another card. Before getting one it’s always a good idea to look at all the cards available and pick one that matches your lifestyle. Also, make sure that you find a card with a great interest rate that comes with many perks. If you do that, you will have a great card that you can use for many years to come.

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