With the media loaded with stories of credit card companies’ new concealed charges and interest rate increases since the credit crunch began in 2007, the consumer needs now more than ever to do background research before signing up for a credit card. Choosing a good credit card is about more than simply finding the one with the lowest purchase APR or annual fee; depending on your needs, the card with the lowest purchase APR or yearly fee might not be the best choice. Here are the four critical factors that must be considered when doing an in-depth credit card comparison search:
One: fees. There is more to credit card costs than just the yearly fee. Some card companies charge a 3-percent fee for each balance transfer. Many credit cards also impose foreign transaction fees, cash advance fees, bank wire payment charges, and convenience-check fees. Failing to grasp these fees often leads to unpleasant surprises on your bills.
Two: the introductory rate. Credit card companies grasp the nature of their market. That’s why they keep changing credit card offers to outstrip their competitors. Many individuals sign up for credit cards to exploit special starter rates. It’s crucial to understand how long these introductory rates last and what the real rates will be following the initial “honeymoon” period.
Three: the annual percentage rate. APR is one the most common factors utilized to decide among the loads of credit cards out there. But it is important to remind yourself that APR is often not a single number. Consumers should focus on not only the purchase APR but also to cash-advance and balance-transfer APR. One can presume that a card publicized as having a zero percent APR for purchases offers the same rate for cash advances and balance transfers, but that is often not accurate.
Four: the grace period. A lot of people assume that a 30 day grace period is automatically included with all cards. However, there are some credit cards that come with 60 day grace periods and other cards that come with grace periods of only 20 days. Ignorance of a card’s grace period can result in overdue payments and a weakened credit score.
Enrolling for a credit card binds you into a relationship with your credit card issuer. When you thoroughly compare credit cards and understand the provisions of that relationship before applying, you will avoid significant surprises on your bills and remove pointless stresses from your financial life.
Kirby Sutton is a freelance writer, journal editor, and ebook author with a master’s in finance. He frequently writes articles about consumer credit issues.