NEW YORK, July 23, 2021 (Newswire.com) - Choosing a credit card doesn't have to be a daunting process. Whether you're ready for your first or your next card, it's important to understand the major factors between your options. This way, you can make the best decision for your financial goals and needs.
To help, we'll break down the biggest factors to look for when you need to compare credit cards.
Low introductory APR
Most credit card providers charge an annual percentage rate (APR) for unpaid balances, often ranging from 10-30%.
If you pay your full statement balance each month, you won't be charged interest and won't have to worry about APR. If you anticipate carrying a balance or making a large purchase, however, it can be helpful to find a credit card with a low or 0% introductory APR.
It's important to note that there are two types of 0% intro APR: 0% APR on balance transfers or 0% APR on purchases. A balance transfer card is best for paying down existing credit card debt, while 0% intro purchase APR gives you more flexibility on new spending. Just be sure that when the introductory period ends, you're prepared to pay off your balance or incur the new, higher interest rate.
No extraneous fees
Along with APRs, credit cards can come with a range of additional fees, such as:
- Annual fees. A yearly charge for card holders.
- Late fees. A charge if you fail to pay the minimum amount due each month.
- Over-the-limit fees. A charge if you make purchases that exceed your monthly credit limit.
- Cash advance fees. A charge if you borrow money from your bank through your credit card.
- Foreign transaction fees. A charge for purchases made outside the U.S.
You can avoid late fees and over-the-limit fees by paying your balance on time. Other fees like annual fees and foreign transaction fees will set in just from regular card usage. That's why it's important to find credit cards with limited fees, such as no annual fee for simply being a credit card holder.
Credit cards may offer rewards programs, so you can earn money or perks each time you spend.
Common rewards include:
- Cash back. Recoup a percentage of your purchases in cash. For example, you might earn 3% cash back on groceries and restaurants, and 1% on everything else. This cash may be deposited back into your account or applied to your next statement.
- Points. Earn points each time you spend in certain categories. You can then redeem these points through select forms of spending which can include travel, statement credits, gift cards or retail purchases.
Be sure to choose a rewards or cash back credit card that fits your spending categories and lifestyle.
Rewards programs aren't the only perks of being a credit card owner. Some cards may offer bonus benefits, such as:
- Sign-up bonuses in the form of points or cash back
- Purchase protection for stolen or damaged goods
- Insurance for car rentals
- Travel accident insurance
- Free credit monitoring
Remember to read the fine print when choosing a credit card so you can be aware of all bonuses and benefits.
Source: iQuanti, Inc.