Choosing the Perfect Credit Card

These days we are constantly inundated with ads for credit cards. That can make choosing the right one a challenge. In order to choose the perfect credit card you are going to have to take a number of factors into consideration. Remember everybody’s needs are different; the perfect credit card for you isn’t the same as the perfect card for somebody else.

The main thing that you are going to want to look at when choosing the perfect credit card is the interest rate. Far and away the biggest expense with a credit card is the interest rate. For some people this may not be a big concern, if you always pay your bill in full each month it probably won’t matter. But for most people the interest rate is critical. Even if you only save a couple of percentage points that is really going to add up. Surprisingly most people don’t really pay attention to the interest rate when they sign up for a card. This is a mistake, the interest rate is critical.

What people do pay attention to when they are signing up for a new card is the introductory rate. They often see the ads offering a very low interest rate and rush to sign up. There is nothing wrong with this and in many ways it can be beneficial. You do however have to be careful. If you can get a low introductory rate that allows you to transfer your outstanding balance to your new card you can save thousands of dollars in interest. However, if the regular rate on the new card is much higher than the rate you are currently paying you will find yourself in even worse shape when the introductory rate has expired. If you think no problem I’ll just transfer to a new card with a low introductory rate when that happens think again. The credit card companies have caught on to that one. If you try to switch cards in the first year the regular rate will be applied retroactively to your account.

The other things that you are going to want to look at when you are choosing the perfect credit card are the fees. These can range from nothing to several hundred dollars a year. This can be tricky; ideally you would like a card with no fees. However if you can get a substantially lower interest rate by paying an annual fee it is probably worthwhile. Unless of course you always pay your balance in full each month. You are going to have to look at how you use your card and whether you pay it off in full each month and then compare the fees and the interest rates to come up with the perfect card. It can be confusing but if you put a little effort into it you will definitely be better off.