Tuesday, September 27, 2011

How to Choose the Correct Credit Card

Find the Credit Card That's Right for You

Choosing the correct credit card is a difficult decision that is based on many factors. There are thousands of credit cards available of the market today, and each one has different payment terms, interest rates, and rewards perks. Sorting through all of the different offers can be time consuming and complicated. Fortunately, there are ways to save time when looking for a credit card.

Start by deciding which issue is most important to you: interest rate or rewards. If you frequently carry a balance on a credit card from month to month, then you'll want to find a credit card with a low interest rate. If you usually pay off your balance every month, rewards will be a more important factor when deciding on a credit card.

Whether you're looking for cards with a low interest rate or great rewards, start by looking through the cards listed at Fatwallet.com. Ideally, find about five or ten cards with offers that interest you. These cards should have great interest rates, low or no annual fees, and/or a great rewards program. Don't worry about the details on these cards just yet.

Make a spreadsheet from this list with a row for each of the cards you are interested in. On the sheet create a column for each of the following categories:

  • Name of the card
  • Annual fee
  • APR, otherwise known as the interest rate
  • Rewards program
Depending on what you're looking for, you may want to break down the rewards program column into several different columns specifying how points are earned and how the points can be spent. People who frequently incur late charges or fees for going over their balance may also want to include these columns in their spreadsheet.

Next, start eliminating cards with the worst deals. If you carry a balance, be sure to eliminate the cards with the highest interest rates. For people shopping for a good rewards card, eliminate cards with poor programs. For cards with annual fees, make sure the rewards will make up for the fee. If it doesn't cross the card off your spreadsheet.
Finally, read the fine print for each of the remaining cards, make sure your spreadsheet accurately reflects what you will actually pay, and make a decision.

Presented by Fatwallet(dot)com, providers of cash back, HP coupons, and the best deals!

1 comment:

  1. This is kinda basic/taken-for-granted knowledge, but it's well to note that "risk implications" include reward implications - over the long-haul (that chart's a fairly short-term window, starting almost at the all-time peak of the stock market, which implies right before the biggest downswing in recent years), stocks will pretty much invariably outperform bonds - but if you're not investing for the long-haul (e.g. you may want the cash shorter-term, as you note), then you should definitely go with less risky investments. online savings account