Important Tips to Choosing your Credit Card
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. Be sure to choose your credit card in a wise manner. In this article, you will be able to learn some things that needs to considered on the selection of a credit card.
The Interest Rates
On a credit card, you will be able to see the interest rate appear an the Annual Percentage Rate (APR). 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. With a fixed rate card, you are going to know what is going to be the interest rates for each month and cards with variable rates tends to fluctuate. It is very important to take note though that even cards that comes with fixed interest rates, it could change because of certain triggers like the card payment, going over its limit or cards that are late. It can also be due to the case where the issuer of your credit card is going to decide changing it.
Credit Limits
This actually is the amount of money to which the credit card issuer is going to be willing to let you borrow. This is based mostly on your credit history. You would not want to be in a situation to where you are close in maxing out the credit limit. This will do some damage to your credit score and some credit card issuers actually cuts off the credit limits of some customers to an amount that are much lower that their current balance. There is likewise a penalty if this happens.
Its Penalties and Fees
There are various ways with how the credit card issuer can make money from you. The common charges will include fees on the transactions like balance transfers and cash advances or through simply asking on increasing your credit limit or in making payments through phone. There’s actually various penalty charges when paying your bill late or when going over your credit limit.
See to it that you choose credit cards with reasonable fees. On the balance transfers, be sure to look for offers that have no transaction fees and also one that have 0% interest on its 12 months. You should likewise avoid paying extra with its reward programs.
The Incentives
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. See to it that you will look for programs that offers flexibility such as rewards and cash or travel that you could use and one that’s easily earned and redeemed.