August 26, 2015

Choosing the Best Credit Card For You

Choosing the Best Credit Card For You

As the use of cash falls by the wayside and monetary transactions become increasingly digital, it is important to understand the terms and advantages of your credit card agreements so that your daily purchase activity maximizes the benefits that are currently available in the market. But before you apply for your next piece of plastic, you should have a solid sense of your credit history and spending habits so that you can find the type of credit card is best for your needs. There are sites like BestCredit.net that are helpful in determining which is the best credit card for you, as there are many categories available.

Some cards offer travel credits (for airfare or hotels), contribute to college savings, free balance transfers, or cash back on your purchases. In many cases, however, marketers will offer these rewards as a way to distract customers from excessively high interest rates (APRs). But as long as you have a strong credit history and you are in a position pay off your balance in full each month, these factors will be largely irrelevant. If you do know, however, that you will not be able to repay your charges in full, it makes much more sense to look for the lowest possible APR.

Choosing Your Preferred Benefits

Interest rates in the single digits are generally acceptable but as long as your credit rating is good, is it usually possible to find introductory rates that are very low (albeit temporary), and these cards can be useful for those looking to stop using cards with unnecessarily high APRs. The trade-off for these types of cars is that their rewards benefits are generally not as attractive. So, it is important to take these factors into consideration, assess your individual, needs obligations, and priorities, and then select the card category that is most appropriate for you.

For example, a credit card that offers frequent flyer miles will be of little use for someone that rarely travels long distances. Alternatively, agreement conditions that offer free Barnes & Noble points for cardholders with balances over $500 will wind up accumulating more in interest debt than it will in spendable currency for books and music. In cases like this, it makes more sense to avoid the rewards and opt for the lowest possible APR. Rewards and interest rates generally make up the classic “tug of war” that makes up the environment of credit cards, so you will need to determine which side is more important for your immediate and long-term needs before committing to any lender.

Pre-paid Options

The last alternative that should be considered is the pre-paid card, which allows users to avoid interest rates altogether. An added advantage is the fact that these cards can help to reduce general financial stress (as you are simply spending your own money), and to build your credit history as there will be a record of your transactions and spending habits. This is often considered to be the best choice for younger borrowers or those with unfavorable credit histories.

For example, if your credit score is below 500, your options will be limited if you start looking for a new credit card. In general, rewards benefits will be limited and your available APR will be high. In these cases, it often makes sense to avoid these problems altogether and rebuild your credit reputation with a pre-paid card. Overall, it is important to consider all of these options because each individual credit situation is different and only you can know which agreement best meets your financial needs.

Conclusion: Look Past the Hype, Focus on the Terms

Of course, it can be daunting to read the fine print that comes with any credit card agreement. If you are ever unsure, it is best to call the credit card company and ask for a detailed explanation of the terms. One important element to remember is that you should never choose a card with an annual fee, as most lenders do not require this in the current market environment. Also, be aware of the fact that one advantage (such as a reward benefit) will often come at the expense of something else (such as a higher interest rate). For these reasons, you must remember to look past the marketing hype and focus on the specific terms in your agreement. There is a credit card for everyone, so remember that if the agreement in front of you does not look right, simply wait and look for the next opportunity.