Credit cards are like chainsaw’s, it is a tool that’s very handy, but it can cause a lot of damage when you will use it improperly. This is why it is of high importance that you choose your credit card wisely. In this article, you will be able to learn some things that needs to considered on the selection of a credit card.
The Interest Rates
On a credit card, you will be able to see the interest rate appear an the Annual Percentage Rate (APR). This could be a fixed rate or this can be a variable rate that’s tied to another financial indicator that’s known as prime rate. Through a fixed rate card, you will be able to know what will be the interest rates from every month and a card with variable rates can fluctuate. But you should be aware that cards with fixed interest rates could be changed based with certain triggers like the card payment or cards that are late or when you go over your limit. This may also be because of the case to where the issuer of the credit card decides on changing it.
Limits on Credit
This would be the amount of money which the credit card issuer is willing to let you borrow. This will have a basis on your credit history. You would not want to be in a situation to where you are close in maxing out the credit limit. This in fact can do some damage to the credit limits of customers towards an amount that’s lower than its current balance. There’s also going to be penalty if this will ever happen.
Its Penalties and Fees
There are various ways as to how a credit card issuer can make money off you. These common charges will include fees on the transactions like balance transfers and cash advance or in asking to increase your credit limit or by making payments through phone. There’s actually various penalty charges when paying your bill late or when going over your credit limit.
Be sure to choose credit cards that have reasonable fees. On balance transfers, it’s best that you search for offers that comes with no transaction fees and one that comes with zero interest for its 12 months. Avoid also paying extra on their reward programs.
A lot of card issuers mostly offer a reward program that offers a reward program for customers so they will be included in using their card. You should try looking for programs that comes with flexibility like rewards and cash or travel which you can use and one which could be redeemed and earned easily.