Finding the best credit card offer in the market is probably no different than finding a needle in a haystack. Let us try to make it more feasible with the following ten tips:
Tip 1: Know thyself
Study the most important factor – You! Be honest when you look at your spending tendencies. Know your credit card needs. List down your goals from getting a credit card. Are you the sort to overspend if given a chance? Do you need a card only in case of emergencies or is it to purchase something you cannot afford at one go and would like to pay off monthly? Do you hope to increase your credit rating with your card or is it required to make internet or phone payments? Understanding your needs and habits will allow you to choose a card that is best for you.
Tip 2: Low APR on both purchases and cash advances
Often credit cards are used to supplement customers financially when in need and the resulting credit card balances are paid off monthly over a period of time. Additional interest charges are applied to these balances. As such, it is crucial to know everything about the Annual Percentage Rate (APR). Ensure that the APR is low so that you do not end up paying much more on interest in addition to the principle sum owed. Sometimes, the low APR applies only to purchases made. The best credit card offer is preferably one in which the low APR applies to purchases as well as cash advances.
Tip 3: Fixed APR
Most often, low APR is only introductory. Please avoid them unless you are doing a balance transfer to pay off balances on another card and you are SURE that you will be able to pay it off within the introductory period. Usually high interest rates will kick in after the introductory period and payment will pose quite a nightmare after that. Also check on the company you are getting the card from. Some companies have a tendency to change (normally, increase) their interest rates often blaming it upon economy. So, for the best credit card offer, favour a company with a more stable operation and as much as possible, go for a fixed APR.
Tip 4: Calculation of balance that APR is applied to
The 3 common ways of calculating the balance to which APR is applied are:
Two-cycle balance – Avoid this method as you may wind up paying additional interest
Average daily balance – Most common type
Adjusted balance – Most beneficial to consumer
Tip 5: Overlimit
Unlike in the past, most credit cards allow you to continue paying for purchases even if you have reached your credit limit. It is best that you do not have this option so that you can prevent getting deep in debt. If you do have or want this option available, compare overlimit fees which are an addition to the interest charged on the outstanding balance on the credit card. The lower the overlimit fees, the better they are for you.
Tip 6: Transaction charges, late fees & annual fees
These additional fees can vary quite a bit from one credit card to another. So in order to land on the best credit card offer, remember to compare these. Some cards even offer zero annual fees.
Tip 7: Grace period
If you are one of those responsible consumers who will pay off the credit card balance completely each month, you should compare the grace period offered. The best credit card offer should ideally have a longer grace period. Some offer anywhere from 25 to 72 days.
Tip 8: Reward Programs
If you will be using your credit card to make a lot of purchases, you need to be concerned about rewards programs in addition to low interest rate and long grace period. Rewards program may even come with cash back offers which may be used to offset annual fees. Go through what the different credit card offers entail and select the one that suits your needs most.
Tip 9: Customer service
The best credit card offer must offer the best customer service too. Often overlooked, this factor will only affect people when in need. Suppose you are overseas and you run into a problem with your card, you must be able to get effective customer support that is quick and 24/7. Obtain referrals from current users of the cards you’ve narrowed down to before making your final choice.
Tip 10: The fine print
People hate reading the fine print. almost 75% admit to not doing it. It is a struggle especially with all the technical jargon. However, the fine print is important. If you really cannot bring yourself to read everything, at least read the portions that discuss the 9 other areas of concern mentioned above. Ensure that your final decision on the best credit card offer is well-informed.