When looking for credit cards, precise and in-depth comparisons are absolutely necessary. Not only can you easily decide which credit card to apply for, you can also minimize the risk of ending up with the wrong card. The perfect credit card should be the one that suits your spending needs, offers the benefits you need, and supports your overall budget. To facilitate your selection, here are the three main criteria that require your consideration.
Interest rate
Interest rate, also called Annual Percentage Rate (APR), describes the amount you have to pay whenever you have an outstanding balance on your credit card bill. There are two main types of interest rates: fixed and variable. While variable rates fluctuate with market indices, fixed rates do not. Usually, fixed rates are much higher than their variable counterparts.
Looking for credit cards? Review the interest rates first
For most individuals, interest rate comparison is the main basis for determining the long-term cost of using a credit card. Therefore, you have to make sure that you get the lowest possible interest rate possible, especially if you intend to make minimum payments only.
Credit card rewards or incentives
Rewards are one of the most important credit card features that people look at these days. Sometimes, individuals base their credit card selection solely on the merits of credit card rewards and incentives. Rewards and incentives range from travel points to cashback bonuses and purchase discounts.
There are many forms of credit card benefits from which you can choose, each designed for specific customer needs. That is why when looking for credit cards, it is best if you inquire what incentives you can avail of and whether you really need those incentives. This will aid in deciding which credit card suits your preferences. The most popular benefits these days are airline miles, cash back bonuses, and cumulative reward points. You can pick one of these but you can also get all three if the credit card provider offers them.
Other fees and charges
Aside from interest charges, other fees may apply on credit card usage such as late payment fees, annual fees, and balance transfer fees. If your purpose is to save some money, then looking for credit cards with lower fees and charges will definitely help minimize your expenses.
Credit cards are fun to have not only for shopaholics but also for people who enjoy earning rewards and taking advantage of travel points. However, there are other things to consider, such as interest rates.
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