Credit cards are tricky things. They give you the power to buy almost anything you like, but may lead to a long spiral into debt. Of course, when you need some extra money, or just don’t like carrying cash around, credit card offers are awfully tempting. Make a rash decision and you may pay for it, so how do you tell which credit card offer is best for you? If you follow this guideline, you’re well on your way.
Introductory rates are great, but…
Introductory rates are just that, an introduction. They’re designed to hook you in, and if you’re not careful can hurt you in the long run. The most common offer is 0% A.P.R. (which is basically the interest rate plus other charges) for the first 12 months. That’s all well and good, but the A.P.R. can jump up to 20% after that first year is up. That’s why you need to read the fine print.
What’s important to you?
Different types of credit cards have different types of rewards. For instance, some cards focus on cashback rewards, some as high as 5%. Other cards are geared towards frequent travelers and offer reward miles instead of cash. To find the right card, you have to decide what reward is best suited for you.
Tip: If you’re planning on making a big purchase, that’s the ideal time for a new card. Many credit card companies offer a high reward if you spend x amount by a certain time (i.e. spend $2,000 in the first three months, get 10,000 miles).
One of the best resources you can use regarding choosing a credit card are the people around you. Almost everybody has a credit card these days, and your friends and family are no different. They can give you trusted reviews on the cards they have, and also make recommendations. The Internet is also a fabulous place to find information about credit cards (ex. this blog)! You are going to find the widest selection of credit cards available, along with their rewards online. However, reviews may be biased, so take them with a grain of salt. That’s why it’s important to talk to someone you trust once you have narrowed down your selection.
It’s easy to be seduced by a high credit limit and 0% introductory rate, but sometimes it can be too good to be true. That’s why a little homework goes a long way. You’ll find that, with some research, you’ll have the perfect card in no time.