Credit cards are like chainsaw’s, it is a tool that’s very handy, but it can cause a lot of damage when you will use it improperly. For this reason, you should choose a credit card in a wise way. With this article, you are going to learn some things that will help you choose your 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. In a fixed rate card, you will learn what is going to be the interest rates for every month and cards that have variable rates could fluctuate. You should however be aware though that even cards with fixed interest rates can change due to certain triggers such as the card payment or cards which are late or if you will go over the limit. This could also be because the issuer of the credit card will decide on changing it.
This is going to be the amount of money that the credit card issuer will 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 in fact can do some damage to the credit limits of customers towards an amount that’s lower than its current balance. There’s also going to be penalty if this will ever happen.
The Fees and Penalties
There are various ways as to how a credit card issuer can make money off you. These common charges will include fees on the transactions like balance transfers and cash advance or in asking to increase your credit limit or by making payments through phone. There are various penalty charges when paying your bill late or if ever you go over on your credit limit.
It’s important to look for credit cards which comes with reasonable fees. On its balance transfers, consider those that have no transaction fees and those that also have 0% interest rates for at least its 12 months. Also try to avoid paying extra on its reward programs.
There are a lot of card issuers that offers a reward program for their customers so they will be induced in using the card. Be sure to look for a program which will offer flexibility like rewards and cash or travel that you could use and easily earned and can be redeemed.