Credit cards are a great way to establish good credit and finance purchases over a short period of time. Because they allow for quick financing when you need it right now with flexibility on payments, they’re by far the easiest credit deals that you can get and have. Choose from our 12 categories of the best credit card offers and deals for the right fit.
While dozens of banks, credit unions, airlines and retailers offer many types of credit cards, each with different perks and terms, there are four important factors to consider before applying for a credit card account. Take a look at our hints and tips to help you save money and establish good credit for the long term.
Annual Percentage Rate or APR is the rate at which interest is applied to the balance of any charges that are not paid off by the close of the billing cycle each month.
On fixed rate APRs, the credit provider bases the amount of interest charged on an average of the daily balance, multiplied by the interest percentage, divided by the number of days in a year. Variable rate APR’s fluctuate however, since they are tied to the prime lending rate set by the Federal Reserve, here: federalreserve.gov.
The APR may be different for specific types of balances as well. This includes balance transfers and cash advances taken on a credit card. Many credit card providers also increase the interest rate dramatically if a payment is made late.
Some credit cards also offer low introductory interest rates to open a new account or to transfer balances from other cards. After the introductory period is over however, introductory rates often revert to a much higher interest rate, raising the minimum payment dramatically.
Hint: Since a low or zero APR helps you save money, you can use your interest savings to pay off your debt quickly or you get to buy more goods and services.
Credit limit refers to the monetary spending limit the credit provider places on the new account. It is generally the lowest for student credit cards and those who have not established a solid credit history yet. Many credit card providers are willing to raise the credit limit upon request once the user has demonstrated the ability to make monthly payments in a timely manner Hint: As your credit gets better, your credit limit goes higher.
Fees are a part of most credit card deals and can add up quickly for the user. There are many different types of fees associated with credit cards and their use. These may include fees for late payment, charging over the credit limit, making a payment by telephone, or triggering overdraft protection. Some credit cards charge annual fees for membership as well.
Hint: If you have five credit cards that charge a $50 annual fee each, then that’s $250 a year. Thus, the ideal is to choose a card that has zero annual fees and the lowest APR as much as possible.
Rewards are offered to card users by many credit card companies in the form of points, or cashback. There are many rewards programs currently available, tied to a variety of cards.
Some credit card providers offer points on specific categories of purchases such as gas, groceries or travel while others reward card users the same amount of points or cash back regardless of what they purchase. It’s important to find out if reward points can be converted to cash or if they can be used for online purchases as well.
Many credit card rewards expire by a given date while others roll over and accumulate. Some card providers even allow users to apply their points to monthly payments, or toward the entire balance on the card. Lastly, bonus points are offered throughout the year on certain credit accounts. These are in addition to the standard rewards already given to card users.
While credit cards allow us immediate access to money, goods, and services, they need to be managed wisely. Many of the financial difficulties we encounter with cards can be avoided with good information and planning before we apply for credit.
BestCredit.net lets you compare interest rates and a whole host of offers and deals to help you find the right credit card for you so you’ll save money and get good credit for the long term.