Choosing a Credit Card
Shopping around and choosing the best credit card for yourself is likely to be well worth the effort in saved interest and fees . We look at the key ponts to consider when choosing what the best credit card is for you.
Priorities can vary depending on how a person intends to use a credit card. Someone interested in transferring a balance will be more interested in the transfer rate and fee, than a regular user who might consider the APR on purchases and cash advances more important.
Key Card Features
Choosing the right card can be tricky because you need to match the card features with your usage pattern. Our choices here are based on a Credit Card for occasional and Emergency Use only and we therefore can make the following assumptions:
- The card will be paid off completely each month and no balance will be carried over.
- The card will not be used for cash withdrawals
Because we intend to pay this card off at the end of each month APR is not as important as features like 'grace period' and Fees. Though it is still important because in reality - if there is an emergency, you may have to carry a balance. Here is a list of features we should look for.
- No Annual Fee
- Long Grace Period - minimum 25 days
- Good APR
- Other APR's on things like Cash Advances
For all credit card choices the following features should be avoided.
- Two-cycle Billing
- Minimum Finance Charges
- High Penalty Charges and Interest Rates
Other Credit Card Questions to Ask
Besides the key credit card features above you should find answers to the following questions.
- If you carry a balance, is there a grace period on new purchases?
- What is the Cash Advance Fee Charge and what interest Rate Applies to Cash Advances
Credit Card Rewards and Incentives
Other considerations would be if there are any additional bonuses or incentives attached to the card that might benefit you. You choice should not be based on these incentives but can be a determining factor between to similar cards. These can be things like:
- Rebate on purchases
- Frequent Flier air-miles or phone-call minutes
- Extra product warrenty cover on purchased items
- Car rental insurance
- Travel accident Insurance
Information about Credit Cards
Under Federal law, all solicitations and applications for credit cards must include certain key information in what is known as a "Disclosure Box". The information includes the following:
- Annual Percentage Rate (APR) for purchases
- Other APR's - Cash Advance APR, Balance Transfer APR,Penalty Rates etc
- Variable Rate Information
- Grace Period for repayment of balances for purchases.
- Method Of Computing the Balance for Purchases
- Annual Fees
- Minimum Finance Charge
- Transaction Fees For Cash Advances
- Balance Transfer Fee
- Late Payment Fee
- Over the Credit Limit Fee