Simple ways to find the card that is right for you
Whether you’re in the market for a new credit card or trying to sort out the promotions you get in the mail, understanding credit card terms can help you decide which credit card offers to consider and which ones to shred.
All credit cards have certain features in common. The difference is in the details—the fees and interest rates that are charged, and the benefits, services and perks that particular issuers provide. Here are some critical questions to consider:
Compare the costs.
A credit card can be a handy tool but it’s also a serious financial obligation. To be sure you understand what you’re getting into, review the terms of the card. Differences in rates, fees and other terms can make a big difference in the cost of your credit.
How important is interest rate? Compare:
- The standard annual percentage rate (APR) for Purchases, Balance Transfers, Direct Deposit and Check Cash Advances, and Bank Cash Advances.
- Whether the rates are non-variable or variable; variable rates go up or down periodically, based on a reference rate like the U.S. Prime Rate.
- If there is an introductory rate, how long it will last and what the rate will be after the introductory period.
- The penalty rate, if any, and when this rate may be imposed, such as if your payment is late.
- The method used to calculate the balance that will be subject to interest charges each month.
- Fees and penalties, including the annual/monthly maintenance fee, transaction fees, and fees for being late with your payment.
- The length of the grace period for purchases. Remember, to qualify for a grace period, you must pay in full every month.
Managing Credit Tip #2
Looking for the best customer service? Talk to friends and family to see which credit card issuers they recommend.
Benefits can make a difference.
When cards have similar rates and fees, benefits can be a tie-breaker. Look for features that make a particular offer stand out from the crowd. Just be sure they’re features that you’ll actually use.
For instance, are you interested in:
- Rewards programs? These can include travel programs, cash back, merchandise offers or the flexibility to choose among several types of rewards.
- Service? Convenient and flexible customer service can make a real difference, especially if you need help when traveling. Most issuers have several ways to access customer service, including by phone, in person at a branch or online.
- Insurance? Travel accident insurance, purchase protection and auto rental insurance can save you money and provide peace of mind.
- Perks? Concierge services, travel assistance, cardholder discounts and other perks can add convenience, flexibility and value.
- Shopping at a favorite store? Private label cards can usually be used only at the sponsoring store or chain but they can offer great value in discounts if you shop there frequently.
How does your current card stack up?
Loyalty is great, but blind loyalty to a credit card could cost money. If you already carry a card and you’re not sure what the terms are, now is the time to find out. You’ll find some information on your credit card statement. For the rest, if you don’t have your credit card agreement on file, visit the company’s Web site or call customer service to get the information you need to compare your card to the rest of the market.
Take action now.
Now that you know what to look for, it will be easier to find a credit card that’s right for you. Follow up on the best offer—and shred the rest.
What's next? Which credit card is right for you?