Credit card offers come in the mail, they come over the telephone and the come to you face to face in all kinds of places from departmental stores to colleges. Choosing the right credit card yourself can not only build itself to be a fruitful relationship between you and the creditor but also save you thousands of dollars in the long run. Before you pick out a credit card you need to consider certain basic points such as what your financial needs are, to what purpose you intend to put the credit card etc. Listed below are some of the common points and questions that you should ask yourself before choosing a credit card for yourself.
What kind of a credit card do you want?
Believe it are not but credit cards of several different kinds. Different credit cards are suited to different financial needs of people. A standard credit card may be very different from a balance transfer credit card or a rewards credit card. Make sure you choose one that fits your need the best.
What is your credit card usage?
How you are you intend to use your credit card makes a lot of difference in the features that you should seek. For example if you want to use your credit card for making large purchases that you pay off in installments by devolving the balance from one month to another then you probably need a credit card that has a low annual percentage rate of interest. A credit card can allow you to make large passages on credit by providing facilities like cash advance and installment payment for large transactions. A credit card and sometimes offer a great deals and a minimal rate of interest for this purpose. Certain credit cards belonging to certain banking institutions have special deals with the major vendor’s where you are allowed to break your purchases into interest-free installments for six to 12 months.
Check out the annual percentage rate.
This is the primary factor for many people. Since people who revolve balance from one month to another, the annual percentage rate will determine how much money they pay as finance charges. Having a credit card with a low and competitive annual percentage rate might mean that you say thousands of dollars for yourself over the years.
What is the grace period?
Grace period is the duration between the billing data and the due date of the credit card bill. The longer the cycle about time you will have to pay your credit card bill. For example having a 21 day billing cycle might mean that you have a grace period of only seven days from the date that your bill is generated. Whereas a billing cycle of 30 days will give you 10 to 15 days of grace period from the day that you receive your bill and do the due date by which you are supposed to make a payment. This gives you more time to plan for the expenditure.
What are the fees?
The fees involved with a credit card usually come into play whenever there is a discrepancy in the payment cycle. Fees such as over the limit fee, late fee etc. are only applicable if you miss out on a payment or go over the limit of your credit card. However, annual fee may be something that your credit card will charge anyway.
How are the finance charges calculated?
There are different methods by which a credit card issuer calculates the finance charges. One may be more expensive than the other. Common methods of calculating finance charges are average daily balance, adjusted balance, ending balance method, and the previous balance method out of which the average daily balance method is the cheapest.
It’sThis is an important question to ask your credit card issuer. Depending upon the usage that you intend to put your credit card through the credit limit given to you may make a lot of difference to your credit score. Since the credit score considers something called credit utilization ratio you should ideally be using only about 30% of the total credit limit. So the credit limit of your credit card will determine whether or not you stay close to the 30% mark not.