|
||
Comparing a credit card should be no different than comparing two shirts at a local clothing store. It takes a little bit of time and research before you actually pull the trigger. The only thing different about a credit card is that you're not going to be making a purchase, instead you're going to be either starting your credit history or you're going to be adding to your collection that benefits your purchases.
When it comes to comparing a credit card, there are a few key terms to keep in mind. These terms are the APR, the rewards the card has to offer, and the annual fee. Before you start comparing, it would be best that you write these terms down and each card you check out, you can write down exactly what the terms are.
The APR
The annual percentage rate or otherwise known as APR is one of the most important features of a card. This is the rate that's going to be charged to your unpaid balances each month. Generally, the lower the rate, the less money the bank is going to take from you. My word of advice is to make sure that you pay off your card in full each month so that you can avoid this fee. If you're a disciplined spender, you shouldn't have to worry about this but it doesn't hurt to write the rate down.
What rewards are offered?
In my opinion, this is the most important feature of a credit card. This is what is going to benefit you when you make your purchase. If you find out that a credit card is offering a reward based system, make sure you see what the rewards will benefit you and what industry it will benefit you. Some credit cards only benefit you in gas rewards or some may benefit you on all purchases. Make sure you know what kind of rewards you want before you start off your search.
The annual fee
Besides the APR, the annual fee might be the second important thing you should look at. Most credit cards that are worthy of applying for don't have an annual fee. A credit card that generally has an annual fee is a credit card designed for bad credit or a platinum type credit card. The bad thing about an annual fee is that if you don't use your card anymore and you forget to use it, you'll see your statement come in the mail with the fee posted on it.
In my opinion, these are the three top things you should look at when comparing cards. Of course a few other things such as the company and bank issuing the card might matter based on their performances in the past. Another great thing to do is make sure you check around the internet and find out what other people think of the card you're looking at. This will give you a great idea on what you're about to apply for.