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[T261]The Best Credit Cards

by Nicky Pilkington, Nic

In determining which credit card to choose, it's best to know the purpose of getting the card. Credit card companies may offer cards to their clients that have flexible terms with varying annual percentage rates or APRs. In choosing a credit card, an individual will need to study carefully and understand the purpose for getting the credit card.

Different credit cards have different features, APRs, annual membership fees and promotions that they provide their users.

Some credit cards may offer low APRs with no annual membership on the first few years of use although these may change to higher APRs and varying membership costs after the expiration of their waived membership fees and low APRs. In this example, the use of this particular credit card may only be applicable for short term use as there may be other credit cards available that offers fixed lower than current industry's standard APRs. There are also credit cards offered in the market that waives the annual membership fees on a longer term basis as long as the credit card user is able to meet specific purchase and payment targets.

There are credit card companies on the other hand that offers reward points that provides flexibility in choosing how the rewards will be redeemed. Rewards points accumulated from purchases can be redeemed in the form of gifts, appliances, furniture, or even travel miles. For a frequent traveler who's also a frequent credit card user, he can maximize the rewards system provided by credit card companies that offers travel perks with their frequent flyer programs.

There are merchants in the business of retail that are also offering credit cards to help promote the sales of their products. A retail company selling products on the internet may offer credit cards under major credit card companies. While the credit card is technically a standard credit card that can be used in purchases from various establishments, the retail company that provides the credit card rewards the consumer with reward points depending on the amount of purchases made. The reward points accumulated then is converted to gifts, products or redeemable check amounts that can be redeemed for products from their stores on the internet.

In choosing which credit card a person will choose, it's always best to understand the purchase habits the person has. A person who's a frequent traveler can maximize his credit card use by subscribing to credit cards that offers air mile rewards. A frequent shopper on the other hand may benefit from his credit card by getting a card that his favorite merchant is offering and later on redeem the points accumulated from the merchant's stores.

There are a number of important milestones in the short history of credit cards since the first were launched in Britain on 29th June 1966 (the "Barclaycard"). Perhaps the most significant milestone, however, is in 2004 when expenditure on this plastic medium exceeded expenditure in cash in this country. Today, the Association for Payment Clearing Services (APACS) estimates that most consumers pay for at least half their purchases with a credit card. So, credit cards are at least as important as cash, it would seem – but what makes for the best credit cards?

As so often the case, the answer depends entirely on the use to which we are planning to put the credit card. It really is a question of horses for courses. More than that, it is not just a case of one card suiting different individuals' circumstances, but the fact that we all tend to use credit cards for different purposes at different times. The "best" will depend on what we are using it for at any particular time.

With this in mind, the three main uses of a credit card will be:

- To make purchases – this is the original purpose of the credit card. Purchases on credit allow you to buy now and pay later. The principal concern when using the plastic in this way, therefore, is to ensure that as low a rate of interest is applied to that credit transaction. In addition to the rate of interest advertised, however, it is also important to take into account the period of "grace" generally allowed between the purchase and the application of any interest. With credit card statements generally issued each month, then this is usually also the maximum period during which the credit is effectively interest free. The best credit card when making purchases, therefore, is the one with the lowest rate of interest on such transactions and the one with the longest period of grace. If you always pay off the balance on the card before the date demanded on the monthly statement, however, you can always be assured of short-term interest-free credit;

- Balance transfers – with the proliferation of credit cards and intensely keen competition between providers, the second principal purpose is to transfer an existing balance from one card to another. The reason for doing this is the compelling enticement offered by most providers in extending interest-free credit on any such balances, at least for an introductory period. This makes the repayment of your existing balance rather like paying off an interest-free loan. Beware the interest rate that is applied on any new purchases during such an offer, however, since, in some cases, the interest-free offer applies only to the transferred balance and not new spending, which might well attract an even higher rate of interest than applied to your previous card. Points to consider are the balance transfer fee, the best card to hold in these circumstances is the one that offers a zero percent rate of interest on a transferred balance for as long an introductory period as possible and a low/zero (for a period of time) rate of interest on new purchases;

- Cash withdrawals – although practically all credit cards will allow you to make cash withdrawals, no card is best used for this purpose. Cash withdrawals are likely to attract the card's highest rate of interest, which will be applied from the time that the withdrawal is made, without the period of grace normally allowed on credit purchases. A credit card should be used for this period only in an absolute emergency, therefore, and the best that can be said for a card of such last resort is that it should apply the least costly rate of interest on the transaction

Article Source : Disadvantages Of Using Credit Cards

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Both Nicky Pilkington & Gemma Stanbury are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Nicky Pilkington has sinced written about articles on various topics from Credit Cards, Mastercard Credit Card and How to Sell on Ebay. More information about credit and credit cards is available at . Nicky Pilkington's top article generates over 90500 views. to your Favourites.

Gemma Stanbury has sinced written about articles on various topics from Credit Cards, Finances and Health Insurance. Confused.com is one of the UK's biggest and most popular price comparison services. Confused.com helps consumers save money on everything from to. Gemma Stanbury's top article generates over 18100 views. to your Favourites.