Whether you’ve got a handful of credit cards already but want to add another to your wallet or are about to apply for your very first one, it can be one of the most important decisions that you make. That’s because a good credit card will afford you flexibility and convenience and can drastically help with a variety of different things. But a poor choice could leave you swimming in debt. Because of this, it’s important that you take the time to look at a few key elements of credit cards to ensure that you get the best one possible for your finances.
First of all, look at the interest rate. Many credit cards base their interest rates upon your credit, so you may not qualify for the best rates out there. Average rates vary, but ten to twelve percent is a good ballpark to shoot for. Those with bad credit may only be able to get cards with twenty or even thirty percent interest, and these cards should be used with caution. Also be sure that you’re not just looking at an introductory interest rate. Some cards offer low interest rates for the first six months before the standard rate is introduced – take care that you know the specifics of this term.
Now take a look at annual fees and other hidden charges. Some credit cards include no annual fees and no startup or activation fees. Others may cost you hundreds just to get started – normally those available to people with poor credit. While you may not be able to get a fee-free card, be sure that you understand the presence of these fees and just what they’ll be costing you each year. And ensure that you’re completely aware of what kind of late fees and penalties are applied to your payments, otherwise you could face a nasty surprise one day.
Finally, investigate the special features of your card. Many of the best credit cards offer rewards and other bonuses for using them. You may be able to find a card that gives you cash back on certain purchases or applies a percentage of your funds to rewards like airline miles. Plenty of rewards cards are out there, and if you qualify for them they may provide some benefits that are too good to ignore. Keep these things in mind when you begin your search for your next credit card and you’ll be sure to find the right one for you.
