Credit Card Comparisons

Tips to Save Money and Make the Best Card Choice

best credit card

Performing credit card comparisons can help you decide which cards are worth considering and which offers are better off ignoring. A credit card is a handy tool but it can also cause you financial problems if you don’t choose the right card and, of course, use it responsibly.

There are many factors you must consider when doing credit card comparisons. Make sure that you fully understand exactly what you are getting into by reading the fine print and learning about the terms and conditions of different credit cards before making a decision.

Begin by looking at the summary box on a credit card’s marketing materials (online or offline) to quickly review all of the card’s main features. Evaluating the summary boxes of various credit cards will allow you to run credit card comparisons fairly easily because summary boxes typically come in the same format.

Points to Evaluate

Some rates, fees, and terms you’ll want to consider when choosing a credit card include the following:

  • Annual Percentage Rate - The Annual Percentage Rate (APR) is the interest rate for purchases, balance transfers, direct deposit, bank cash advances, and check cash advances. APR is the percentage applied to balances that you carry beyond the grace period.
  • Non-variable or variable rates – Variable interest rates fluctuate, while non-variable interest rates stay the same.

  • Grace period – The grace period, also known as a free period, is the amount of time you have to pay your balance in full before a finance charge is applied. The longer the grace period is, the better. The grace period is typically expressed in the number of days from the billing date.

  • Balance computation method – If a credit card issuer doesn’t offer a grace period or you plan to carry a balance and pay for your purchases over time, determine what method the credit card issuer uses to calculate finance charges because it will have an impact on the amount you are charged.  

  • Credit limit – The credit limit is the amount of the money a credit card issuer is willing to let you borrow. Your credit limit should be big enough so that you aren’t ever close to maxing out your card, which could hurt your credit score.

  • Fees – Determine what fees are charged under what circumstances and how much those fees are. Some common fees include annual or monthly fees, late fees, transaction fees, and over-the-limit fees.

  • Customer service – Customer service can make a real difference in your satisfaction with a credit card, so seek a credit card issuer that offers convenient, flexible customer service by phone, in person at a branch, and online.

Rewards Programs

Many credit card companies offer rewards and other incentives for using their card, so it is worth comparing those incentives to determine which credit card would be the most beneficial to you.

Look for a card that offers rewards you’ll actually use and make sure that the rewards can be easily earned and redeemed.

Take note of a reward program’s restrictions, such as limits on the number of points you can earn or when the rewards expire.

Evaluate Your Spending Habits

Determining how you intend to use your new credit card is important because it can help you decide on the right type of credit card for your needs.

If you plan to pay the balance in full each month, then a credit card’s interest rate isn't really important. In this case, a credit card with a long grace period and no annual fees would be your best bet.

If you are going to carry a balance, then look for a credit card that has the lowest possible interest rate. If you plan to use your credit card for almost all of your monthly purchases, then find a card with a high credit limit and a solid rewards program. 

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