If you're like me you get hundreds of credit card offers in the mail every year. Each of the envelopes is designed to make you want to open them. They splash their offering on the outside or invite you too look deeper into what they have for you. At first glance some of the offerings sound really good. They offer free interest, bonus points, gift certificates, and cash back. No matter how good the offer sounds you don't know how good it is until you've compared multiple offers against each other. There are multiple items that need to be considered at the same time to get the whole picture. So as a general rule of thumb: don't sign up for the first offer that comes your way.
Tip Two – Look for hidden fees and penalties
One trick credit card companies have started doing is revoking benefits if you are late with a payment with ANY creditor. Even though you have a perfect record with them they can still take away the free interest and other perks if your credit score changes. A dirty trick? Yes, so look for that in the fine print.
The other little trick is asking if you want extra protection for your credit cards. They've really ramped up the efforts to get you to spent and extra dollar or two for every hundred you have on your balance. They get an extra 1-2% every month without lending any more money. In some cases it might make sense to get extra protection but just realize that your APR is going to be much higher as a result.
Tip Three – Look beyond the offering
Some cards offer the best benefits and look like the clear winner compared to everything else. Carefully examine the whole offer before signing up because there might be a catch. First, look to see if there's a yearly fee. Second, if there isn't a yearly fee look at the APR for purchases and balance transfers. If everything checks out there look at how the rewards are given back to you. Sometimes using the rewards has so many restrictions that it's impossible to get the use out of them.
Tip Four – Compare cards using a rating system
A way to compare multiple cards quickly is by using a rating system. A rating system will give you the gist of what people with the cards have experienced. While rating systems aren't perfect they do give a snapshot of what's good and what's not.
Tip Five – Get a business credit card when you can
If you can applying for a business credit card will give you the best perks. Even if your business is very small or not yet formed business credit are worth pursuing. They often combine to of the best perks, zero percent interest and rewards, where other cards will only do one or the other.
