By David
Because of the vast number of options, it can be a challenge when you attempt to compare card offers, trying to figure out which offers the better deal. In order to help you find a card that is right for you we will walk you through the comparison process.
Compare card types
As you begin to compare card offers you should know that there are a few different types that work best in different situations.
1) Prepaid Cards – These cards are set up in such a way that it makes you the lender instead of the associated card company. By adding money to the card before you spend anything on it, you control your spending limit, and since you are the lender, the money spent from the card is interest free. However because you are not actually borrowing money this type of card will not help you to build credit. It does still however have all the security features of a normal credit card, making it a great option for online shopping.
2) Low- Interest Cards – This type of card has a lower than average APR (annual percentage rate) compared to other cards and is a good choice for balance transfers from higher interest cards and for use as an emergency line-of-credit.
3) Rewards Cards – A rewards card maintains an average APR (around 15%) and offers you rewards for using the card. These cards are great for use on everyday purchases as they will often include a little bonus for things like gas and groceries. Be sure to pay these cards off in full before the end of the grace period to avoid the interest while still reaping the rewards.
4) High-Interest Cards – A high-interest card is designed almost exclusively to help those with bad or no credit to begin making strides toward better credit. These cards have higher than average APR and typically have a low credit limit.
Compare APR
Once you compare card offers and determine the type of card you want, you will want to look at each offer’s APR. For many cards you will find that they have an introductory APR that is around 5% or lower for the first several months. These low rates can be very nice, but remember to do your comparisons with what your APR will eventually become after the introductory rate has expired. The lower the rate you can find, the better off you will be in the long run.
Compare fees
One final consideration when you compare card offers are the fees associated with the card. Make sure there are no fees (such as annual fees) that make the card less desirable when compared with others.
Once you have made your comparisons and found what looks like the best offer to you, go ahead and apply for the card. With any luck, your application will be approved and you can start using your new credit card to build a better financial future.
Leave a Reply