Sunday, October 25, 2015
Every day we are inundated with several offers related to credit cards and many of us want to utilize them. Many of us gets beseeched by the attractive credit cards offers and do not give much of a though about which credit cards would be an ideal fit for our requirements. It is imperative to choose the right credit card as it can help you to save thousands of dollars in the long run. Here is a list of few important factors that needs to be looked into, before choosing any credit cards.
The type of card
There are various kinds of credit cards available in the market and it is important to understand the features of each card, before applying for a credit card. Standard credit cards, premium credit cards, secured credit cards, are some of the most popular types of cards in the market. With standard credit cards, follows the basic principle of revolving credit albeit the roll over balance will be limit to a certain limit that is fixed beforehand. A certain charge is levied for the pending balances by the end of the month. Premium credit cards offer a lot of benefits as compared to standard credit cards. Offers such as cash back schemes, reward points, etc are some of the attractive features of premium credit cards. The fees charged for premium credit cards are comparatively higher than that of standard credit cards. Secured credit cards are specially created for people who have a deplorable credit rating or no credit history. Collateral should be presented to the banks, in order to get secured credit cards. The limit on these cards often equal to the amount of collateral but in certain cases the limit can be increased by the banks. One still needs to make regular payments for credit cards.
Annual percentage rate
Annual percentage rate is basically the interest rate that is levied by the bank on balances that are not paid during the grace period. With higher annual percentage rate, one eventually needs to pay a huge amount towards their credit card payment if they have roll over balances. Usually there are different annual percentage rates for cash advances, and purchases. Before selecting any credit card, one must be acquainted with the exact annual percentage rates.
Grace period
Grace period is basically the time frame within which one needs to pay for all the balances, after if payments are made after this period then a fine is levied. Grace periods should be longer as it provides you with more time to make the payments without the inclusion of late fines. So it is important to pick a credit card which can give you the maximum time as grace period so that it becomes easier for you to not default on payments.
Fees
One should be aware of all the fees that are levied by the credit card companies, so that you can make an informed decision. Some of the most common types of fees are maintenance fees, late fees, exceeding credit limit fees, which are levied on customers. Few credit card providers also charge fees for providing additional statement of your credit card account. Gathering knowledge about credit card fees is necessary as your unpaid balances can get increased due these fees.
Credit limit
The credit limit for a credit card holds a lot of significance as it impacts the purchasing power of the consumer. People, who are using credit cards for the first time, need to choose a card with a low credit limit so that you can get used the responsibility of using a credit card wisely. You need to choose credit cards with provides you with credit limit as per you requirements.
Rewards
There are many credit cards which offer rewards every time there is a transaction made through the card. Comprehending the structure of credit cards rewards is important and one also needs to know about exact amount of expenses that needs to be incurred for being eligible for the rewards. Cash rewards and point rewards are some of the most common form of reward system that is adopted by credit card companies. These rewards can be redeemed as a form of discount for your next purchase through credit cards.