One could consider a credit card as a very handy tool, however it can actually inflict so much damage when it’s being used in an improper way. This is why it is of high importance that you choose your credit card wisely. In this article, you will be able to learn some things that needs to considered on the selection of a credit card.
Its Interest Rate
In a credit card offer, you will find the interest rates as APR or an Annual Percentage Rate. This can be a fixed rate or it could be a variable that’s being tied to another financial indicator that’s commonly known as prime rate. In a fixed rate card, you will learn what is going to be the interest rates for every month and cards that have variable rates could fluctuate. But you should be aware that cards with fixed interest rates could be changed based with certain triggers like the card payment or cards that are late or when you go over your limit. It can also be due to the case where the issuer of your credit card is going to decide changing it.
This is going to be the amount of money that the credit card issuer will be willing to let you borrow. This will have a basis on your credit history. You will not want to end up in a situation where you are close on maxing out the limit of your credit. This in fact can do some damage to the credit limits of customers towards an amount that’s lower than its current balance. Also, there’s a penalty when this will happen.
The Fees and Penalties
There are various ways as to how a credit card issuer can make money off you. These common charges will include fees on the transactions like balance transfers and cash advance or in asking to increase your credit limit or by making payments through phone. There are various penalty charges when paying your bill late or if ever you go over on your credit limit.
Be sure to choose credit cards that have reasonable fees. On its balance transfers, consider those that have no transaction fees and those that also have 0% interest rates for at least its 12 months. Also try to avoid paying extra on its reward programs.
A lot of card issuers mostly offer a reward program that offers a reward program for customers so they will be included in using their card. You should try looking for programs that comes with flexibility like rewards and cash or travel which you can use and one which could be redeemed and earned easily.