We see new credit offers on a daily basis, through many forms of advertising; the breadth of options is large. Credit cards come with responsibility to manage your finances well, but if you choose the right card for you, it could mean extra security on purchases, and useful benefits.
Choosing a credit card plan isn’t something that should be done hastily. There are a number of things to take into consideration so read the small print for a full understanding of the card.
The two biggest things to look at are interest rates and benefits. Understanding which is most important to you will inform your decision on the right card.
Understanding terms such as APR is important when you’re looking at credit cards. If you clear your balance in full each month, no interest will be paid on your balance. However, if you are using a credit card to budget for a large purchase, spreading the cost with a 0% credit card can be an effective method, provided you make the minimum payment.
Credit card providers offer cards at zero percent for a fixed length of time. Decide how much you can afford to pay each month and choose a card with an interest-free period of an appropriate length. Shopping around with a clear idea of your needs is the best way to find a credit card with an interest rate to suit your needs.
If you always pay off your credit card on time, interest rates won’t affect you as much. Instead, you should look at what your credit card company can give you and which plan offers the best benefits for the lowest cost.
Frequent travelers should look at credit cards with travel insurance, air miles and free overseas transactions. Remember to weigh up the cost of the benefits against the cost of the card; depending on your circumstances and spending habits, the fees for some credit cards can outweigh the benefits.
For example, if you’re paying a sizable annual fee for a card that offers free overseas transactions instead of one that simply charges 3% when you go abroad just once a year, in most cases it would make sense to pay per transaction.