Credit cards are a common feature of modern life and most people have at least one. However, not everyone shops around to make sure they have the right credit card to fit their needs.
It may seem like a credit card is just a credit card, but they do vary greatly in what they offer. Different people can benefit from different features from their credit cards, so it can be beneficial to shop around and find the features that best suit you.
Before you start looking for your next credit card, consider what it is you want to use your card for. Will it be for paying bills, making purchases online, or buying products? And will you pay it off every month, or spread repayments over a longer period?
Based on your answers to these questions, there will be different credit card offers that best suit your needs. Here are some of the things you will want to consider when looking at your next credit card.
Annual Percentage Rate (APR)
This is the interest you will pay if you don’t pay your card off at the end of each month. APR can differ greatly between different cards, so if you’re planning on spreading out your repayments, then this will be something you want to pay close attention to.
While this is an important feature to consider, it shouldn’t be your only consideration. Make sure you take into account other issues, such as charges.
Annual Fee
Some credit cards will charge an annual fee for using their card. Again, this number can fluctuate between different cards, so make sure you look around and balance this out against the other benefits of the card.
Paying an annual fee doesn’t have to be negative; it just depends on what other incentives your card gives you.
Charges
It’s important to understand what charges you might incur while using your card. By tracking what you spend, you can know what charges you acquire from a given card. Charges can be applied for things like taking out cash on your card, using your card abroad, and late payments, so make sure you’re getting a card that suits the way you use it.
Charges can really start to stack up if you’ve got the wrong card, so look out for the charges before committing.
Loyalty Points and Rewards
Many credit cards offer loyalty points and rewards on your spending. These rewards allow you to earn free flights, money back on your purchases, or points that can unlock special offers.
Depending on what your financial goals are, rewards can play a part in whether a credit card is a good fit for you. If you spend a lot of money on your credit card, then the rewards can soon start to add up.
Introductory Interest Rates
Some credit cards will offer introductory interest rates to tempt you into switching. This is often seen in the form of a 0% balance transfer. This means you can transfer your outstanding balance from a credit card you already use and not have to pay any interest on that debts for a certain period of time.
While this can be very beneficial for certain people, it’s worth remembering that this is an introductory offer and the interest rate will change after the initial period.
