Monday, October 27, 2008

How to Compare Credit Cards

Not all credit cards are equal so when you compare credit card offers it can be challenging. Additionally, what is best for one person may not be best for another.

When considering which credit card is best for you consider and look at several factors, such as: the introductory APR, the fixed interest rate, annual fees, rewards programs, member benefits, and other card member services.

If you are the type of person that pays their entire credit card balance each month on time then a low interest rate credit card is not as important as one with no annual fees or great credit card benefits.

However, most people are not that disciplined about paying off their credit cards in full and on time every month. If you are occasionally late and carry a balance on your credit cards then a low interest credit card might be right for you. The difference between a low 10% APR credit card interest rate and a higher 20% APR credit card interest rate is significant over time.

In addition to low interest rates and the annual fees you pay on a credit card, you should also consider other member benefits, such as rewards programs and cash back programs. Some credit cards offer programs that reward you for using their credit card for purchases. frequent flyer programs are an example.

Cash back credit cards actually give you cash back or credit toward additional purchases. You receive a small percentage of cash back for the purchases you make with that card. Credit cards that offer cash back programs are the Discover® More(SM) Card and the Citi® CashReturns(SM) Card.

Other things to consider when you compare credit cards are:

  • membership benefits such as travel insurance and baggage protection while traveling
  • type of credit needed for approval
  • online account access and bill payment services
  • unauthorized spending protection

When determining what the best credit card is for you should also consider the interest rate, membership fees and how potential rewards programs are structured.

No comments: