Important Tips to Choosing your Credit Card
A credit card can be considered a chainsaw, you will find that it is really handy, but this can in fact cause so much damage if being used improperly. Be sure to choose your credit card in a wise manner. Below are some of the things that will help you on your selection.
Its Interest Rate
On a credit card, you will be able to see the interest rate appear an the Annual Percentage Rate (APR). This can be a fixed rate or it could be a variable that’s being tied to another financial indicator that’s commonly known as prime rate. With a fixed rate card, you are going to know what is going to be the interest rates for each month and cards with variable rates tends to fluctuate. You should however be aware though that even cards with fixed interest rates can change due to certain triggers such as the card payment or cards which are late or if you will go over the limit. This could also be because the issuer of the credit card will decide on changing it.
Limits on Credit
This actually is the amount of money to which the credit card issuer is going to be willing to let you borrow. This is based mostly on your credit history. You will not want to end up in a situation where you are close on maxing out the limit of your credit. This will do some damage to your credit score and some credit card issuers actually cuts off the credit limits of some customers to an amount that are much lower that their current balance. There is likewise a penalty if this happens.
Its Penalties and Fees
There are various ways with how the credit card issuer can make money from 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 are in fact different penalty charges in paying your bill late or if you go over the credit limit.
Be sure to choose credit cards that have reasonable fees. On its balance transfers, consider those that have no transaction fees and those that also have 0% interest rates for at least 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. See to it that you will look for programs that offers flexibility such as rewards and cash or travel that you could use and one that’s easily earned and redeemed.