How to compare credit card terms and offers
Before you apply for any credit card, you need to ensure that the card is the best fit for you. Most credit cards come with different types of bonuses and offers.
As such, you need to ensure that the credit card you get fits your needs by doing research on different credit cards and comparing their terms, conditions, and offers.
Here are the terms and conditions you need to consider when applying for a credit card:
Type of card
Here are the four common types of credit cards that you can choose from, depending on your needs and preferences:
These credit cards are suitable for people who pay their full balances monthly. The cards offer miles and cash point rewards for each spending activity.
Some of the reward cards have a sign up bonus where they reward users with a certain bonus after spending a specific amount of money in a specified period.
If your spending rates are high, you can select the credit card that rewards higher bonus points because your chances of hitting the set spending target are good.
If your spending rates are low, go for the card rewarding fewer attainable bonus points.
This type of card is best for people with poor credit scores. A cash deposit equal to the credit limit backs it. The credit bureau monitors the spending activities on this card.
Those with zero or poor credit score should go for this credit card. If your credit score is good, however, you should consider other types of credit cards.
The balance transfer credit card is suitable for those who plan to pay their current credit card debt without the high interest rates.
The card will charge you a fee for the balance transfer as well as offer you a 0% introductory rate.
If you are looking for a cheaper option where you will not have to incur those high interest rates, you should consider this type of credit card.
Introductory 0% APR (annual percentage rate)
If you have an existing credit card balance that you cannot pay off, or do not plan to pay back immediately, then the introductory 0% credit card is what you need.
The card offers 0% interest on all purchases and balance transfers for about 12-18 months.
If you have many financial obligations now and cannot afford to pay off your existing credit, then this card is the less stressful option that you may want to consider.
All credit cards come with different applicable fees. Some fees are worth incurring while others are just not worth it. Common credit card fees you need to consider and compare include:
The credit card company will charge you an annual fee because of the privilege of using a credit card.
When selecting a credit card, you may choose one that charges you annual fees because they tend to have higher sign up bonuses and reward structures. The fee will be worth it.
However if the annual fee is too high for you, you may settle for a card with no fee and fewer rewards and bonuses.
Foreign transaction fee
This is where you pay 3-4 % on all transactions oversees when you use the card.
If you travel abroad a lot, you may want to consider a credit card that does not charge foreign transaction fees because with time, the fees may be too costly for you based on your travel spending.
Late payment fee
Upon late payments, most credit cards will charge you a fee not exceeding $35.
This fee is avoidable if you make your payments on time. If you are afraid that you may not afford to pay your fees on time due to various factors, therefore, consider a credit card with lower late repayment charges.
Cash advance fee
Other credit cards allow you to request cash advances from your card using an ATM or bank branch. You will later have to pay an advance fee.
When considering different kinds of credit cards, it is wise to go for one with the cash advance option. Not all credit cards offer cash advance. Since you never know when an emergency may arise that requires immediate cash, it is better to have a safe option.
However, as you choose the credit card with advance cash, know that if you request the advance, your interest charges begin to accrue instantly and you will pay a higher annual percentage rate.
Although most credit cards offer rewards, each reward system is different. The credit cards offer different reward rates for the different kind of purchases you make. Some offer rewards if you purchase groceries while others give rewards for travel spending.
How to select the best credit card
Find out what your main spending activities look like. Where do you spend most of your money? If you travel a lot for work or leisure, then you probably incur many traveling expenses. Choose a credit card that will reward you based on travel spending.
If most of your spending is on basic things at home, then you will benefit more from a credit card that rewards every grocery purchase you make.
Carrying around credit cards can be interesting and exciting because of the simplified spending experience. Unfortunately, not all retailers accept credit card payment options. Some of the ones that do accept might also prefer specific types of credit cards.
Before applying for the credit card, therefore, ensure that the policies of local retailers and the areas where you spend most of your money allow them to accept the type of credit card you have. The most widely accepted credit card types are Visa and MasterCard.
With the information above, we are confident that you are now ready to choose the credit card that suits you best.