08 Jan Choosing the Right Credit Cards
Choosing the right credit cards can be a challenge. There is no single right answer to this question. Consider your lifestyle, what you normally purchase, and how you can most advantageously use your credit cards. The place you do not want to start is with the advertisements that come in the mail or around the edges of your Facebook page. While some of these cards are perfectly fine, others are less than desirable. While rewards and an initial APR of 0% can sound fine, they do not always add up to a financial advantage.
Here are some leading questions to ask yourself:
2. What credit score do they require? You can check your credit score by using the once-yearly check offered through IRS or by going to Experian, or any of the other credit watch companies. You will also be able to see your score and it should also display why that is your score.
3. Look at the APR, and read the fine print. Not only do you want to know the initial percentage, you also want to know about annual fees, security deposits, and – very importantly – when that 0% initial APR will turn into an interest rating and how high it will be.
4. How will you use this card? Will you purchase consumable items such as groceries and gasoline and pay them off once a month? Will you purchase large items and carry a balance on the card?
5. Do you find the idea of kickbacks and rewards appealing? Or are you happy with a simple, low-interest account without complications?
6. Do you have a margin of disposable income with which to pay your credit card?
7. Will this card be used to consolidate other small cards?
8. Do you want to use this card to help build your credit rating?
9. Are you applying for this card to purchase a specific item?
10. Are you prone to impulse spending?
Comparing Credit Cards
Next, select a website that compares credit cards, such as Value Penguin or Nerd Wallet. Value Penguin presents a menu that allows you to focus on the features you want on your credit card. Nerd Wallet does a side by side comparison of credit cards offering similar features which can be a great help when choosing the right credit card for you. It is a good idea to look at a variety of credit card reviews to see which ones will best suit your needs. As you read, you might even discover some needs of which you were not even aware before you began your research.
Some of the things you might be looking for when choosing the right credit card include gas & groceries, luxury travel, student, improving credit, paying down debt, overall rewards, no annual fee, or a small business card. Those are general categories but there are some other things that you might want, as well.
2. Customer service is 24/7. There is always someone on duty when you need them.
3. The account is accessible online. You can check your balance, examine your purchases, and easily locate your due date, rewards, and any other information.
4. Know whether the card is a credit card or a charge card. Charge cards require that the balance be paid in full at the end of the day.
5. Don’t select too many cards. The number of cards you have affects your overall credit score. It can also signal to lenders such as mortgage companies or automobile companies that you might have too much credit out and will not be able to keep up with the payments.
6. Apply for one card at a time, waiting about six months between applications. Each time you apply, the card companies will access your credit score. This can have the result of lowering it just a tiny bit.
7. Be aware of your rights as a cardholder. The Truth in Lending Act, passed in 1968 in the United States, requires card companies to reveal terms and conditions to potential or current cardholders and to notify them of any changes.
Staying on Good Terms with Your Credit Card Issuer
To stay on good terms with your credit card company, make payments on time. Try to pay more than the minimum balance, especially on consumable accounts. Charge cards should always be paid in full, but a low-interest rate card on which you have large items can be paid out over time – just make sure to pay at least the minimum balance, and pay it on time. If you run into an unforeseen circumstance such as an illness, unexpected bill or job loss, communicate with all your creditors right away. You might not always be able to make them happy, but you will at least be showing goodwill and effort.
No Magic Formula
There is no magic formula for choosing the right credit cards. The process involves learning about cards and how they work, considering your lifestyle and what is important to you, and the kinds of things that you will buy. Keep in mind that when you sign the credit agreement, you are entering into a binding contract between you and the credit card company. Since you would like for them to keep their end of the bargain, then it is up to you to keep your end in good order. Your appropriate attention to detail will help maintain good relationships with your credit card issuer.