Top Factors To Consider When Choosing A Credit Card

Finding The Right Card In A Mountain Of Offers

Whether you are a fan or not, credit cards have a significant use in the financial world, especially when it comes to building your credit history. You may have seen the shoppers with heavy bags of goodies as they plop the credit card out of a bulging wallet and onto the cashier’s counter. Do they honestly need five or six different cards? Ideally, you should have around two or three cards just to keep your credit improving. However, selecting the right card from many available offers is an overwhelming task. Consider these top factors when shopping for the perfect card.

Sign-Up Bonuses

Your eyes may glaze over at some of the sign-up bonus deals available but look past that shining figure. One bank alone may have three or four cards with increasing bonus money amounts. For example, card A has $50 back; card B offers $100, and card C is at an astounding $200. Don’t automatically apply for the $200 bonus offer card, however. Note the different interest rates on those three cards. The card with the highest bonus usually has an exorbitant interest rate above 15 percent. Choose the moderate low bonus amount to save on future interest charges. The bank will only make their money back exponentially when you select the $200 bonus card and hold a consistent balance.

Annual Fees

Credit cards usually waive an annual fee for the first year to entice you to apply. Don’t just ignore the annual fee entirely. You’ll have to pay it eventually. Consider the card’s value when agreeing to a yearly fee. Some cards have great rewards, discounts or insurance protection that you deem necessary. In these cases, agreeing to the annual fee is logical. However, outrageous fees topping $100 a year should be examined carefully. Weigh the card’s value compared to the cost. Credit card issuers are in the business of making money, so it is critical to protect your financial stability with a reasonable card and annual fee that makes personal sense.

Interest Rate

When you shop for a new vehicle, the interest rate is a large part of negotiations. If you have a bad credit score, you are likely to be paying the higher interest rate. It influences your monthly payment, along with the car’s actual value. Credit card interest rates are just as important as your vehicle’s rate. You’ll see the percentage in bold, often referred to as the APR, or annual percentage rate, when you agree to a credit card. Ask the issuer if the rate is fixed or fluctuating. Ideally, you want a fixed rate to avoid excessive increases in interest. However, a fixed rate does not mean the issuer cannot change it. If the card is not paid on time or surpasses its limit, the rate is often raised. Be aware of each statement or correspondence letter. Rates are changed easily as long as the issuer notifies you. If you have a poor credit rating, and you need a car, you look for a lender that is not afraid of working with poor credit consumers ( The same is true when shopping for a credit card. Look for the lenders who are interested in helping repair your bad credit history as well as get you the card you need.

Grace Periods

When you charge an item on the credit card, it enters a grace period. Essentially, you can pay off this charge within the grace period without any interest charges being applied. In a perfect world, you’d never see any interest accumulation if you paid the balance a week after the charge, for example. Most grace periods are 28 to 30 days or a typical billing cycle. Some cards may offer a slightly longer grace period, including 45 days. It is in your best interest to choose an extended grace period, if possible. You have a better chance at paying the balance in full, reducing the risk of interest accumulation. Ask your credit card issuer about their periods to get an idea of your choices.

Low-Introductory Interest Rates

Many issuers use low introductory rates to entice more customers to their card. With rates as low as 1 or 3 percent, you almost forget to check the normal APR. Look at the big picture when you consider these rates. They are mainly teasing you, but the issuer receives its money back when you enter the typical APR. These rates can be higher than 10 or 15 percent, depending on the agreement. If the low-introductory rate is too hard to resist, try to avoid carrying a balance. Your interest accrual will be minimal the first year, but will exponentially increase when the standard APR kicks in. Use the low-interest rate to pay off balances faster than you normally would.

Rewards Benefits

As the credit card industry continues to crowd with various issuers, each card strives to stand out. Frequent flyer miles, points, and other rewards programs all offer lucrative discounts as you charge daily purchases. The rewards only pay off if you do not carry a balance. For example, some cards provide you with 20,000 bonus points when you charge $10,000 in a calendar year. You could charge that amount to receive the points, but carrying that balance will negate the rewards benefits with interest accumulation. Look for rewards that suit your lifestyle, such as mall discounts or hotel vouchers. Continue to spend wisely and pay off the balance. You’ll still rack up the rewards with regular card use.

Business Or Personal?

For most consumers, a personal credit card is enough for basic purchases. If you have a business, even as an independent contractor, a business credit card can offer more incentives. Business cards often come with discounts or access to printing services and networking opportunities through rewards programs. There may be special rates and grace periods for business use as well. Consider your career to see if these cards would suit your situation. The same conservative approach should still be followed by charging items and paying them off as quickly as possible. Interest rates still add up on business cards just like personal ones.

Credit Limit

Everyone wants a high credit limit so he or she can buy that coveted item in the store’s window. However, a high credit limit is not just about potential shopping adventures. When your credit score is computed, one of the consideration factors is limit versus balance. If you have a low balance compared to a high credit limit, your score rises dramatically. When a consumer holds a balance close to the limit’s amount, the score drops. Keep paying off the card, allowing the issuer to increase the limit on their own. It will only benefit your credit history and score in the process.


Read over all the fees and penalties associated with the card before signing the agreement. The interest rate, rewards, and limit may look perfect, but exorbitant fees for cash advances, transactions and balance transfers add up. They may even charge you to pay the issuer over the phone. If the charges look exhaustive and ridiculous in nature, move on to the next card. With so many choices, you do not have to settle on a high-fee issuer. However, almost every card will penalize you if payments are late, below the minimum amount or charges are over the credit limit. Avoid these fees whenever possible.

Balance Computation

Within the card issuer agreement, you’ll see a complicated set of mathematical formulas to create your finance charges. You may be concerned about the figures, but you want to see that the agreement states it’s based on average daily balance. With a 28- or 30-day billing cycle, each day’s balance is added up and divided by the cycle’s days. This number becomes your finance charges for the month. This process is relatively standard, but some issuers use two billing cycles. Avoid these cards because they benefit the issuer rather than the holder.

Consumer Protection

Another card benefit that is often overlooked, but highly regarded, is the consumer protection built into the card. For example, you rent a car using your card for the charges, but return it with a scratch on the door. The card offers you auto rental protection to cover repair charges you would otherwise pay for out-of-pocket. Read all the card’s fine print to see other coverage that most consumers don’t take advantage of. Any item charged on the card is possibly covered with limited fraud liability, return protection, extended warranty and purchase protection. All this information is typically buried in the fine print to keep you in the dark.

Customer Convenience

You no longer have to sit at home waiting for the mailman to bring your monthly card statement. In fact, most issuers have a detailed website to give you instant access to your charges and interest. Typically updated every 24 hours, you’ll see where your charges were made, along with real-time interest rate information. You can pay off the balance at any time online, allowing you to thwart any interest charges before the billing cycle is over. Customer convenience is a big part of choosing the right credit card.

Check The Card Rating

Before you apply for a credit card, check your credit history thoroughly. You want the best score possible to see interest rates go down and the offers go up. Go through each card’s information slowly and even make a spreadsheet with their main points. By comparing cards, you’ll find the right card for you. This is why Credit help Cards is such a great tool for you to use when shopping for a good credit card. In minutes, by e-mail we will send you the best possible credit card matches and ratings, all you have to do is pick the one that fits your needs. this keeps you from having to search through heaps of information and trying to rate them yourself.