Article By : Patrick Mansfield | U.S. Consumer Finance
So, you're thinking about going and getting that next big credit card? Maybe you're wanting to refinance some old debts, or maybe you're looking to cash in big on that next sign-up bonus or rewards program.
No matter what you are looking for in a card, we're going to use this post to talk about some of the things that you should consider when credit card shopping.
When It Comes to Debt
Remember, a credit card can be an incredible asset or a horrible liability depending on how you use it. Unfortunately, the bad far outweighs the good if you use the card poorly, and all of us are prone to mistakes from time. That's why, in this order, you should check these things about the card first:
1)What's the APR? Most cards charge a variable annual percentage rate (APR) from 14-35%. You will want to get a card that has a low starting APR.
2)Annual Fees: Some cards charge annual fees as high as $1,000 just to use the card. If the card is going to charge you an annual fee, make sure the rewards outweigh the upfront cost.
3)Other Transaction Fees: Depending on what you are going to use the card for, you will want to check its transaction fees. Some credit card companies charge you just for using the card overseas, others charge you to transfer your balance to their card, and there are many other kinds of fees that you will want to avoid if they apply to you.
4)Grace Period: Almost everyone misses a payment from time to time. I've missed payments before just because I forgot to pay the online bill, not even because I am a bad borrower! As a result, you will want to know how long the grace period is for when you can pay the card balance without incurring late fees or interest charges in the event that you do miss a card payment.
Rewards are Rewarding!
The main reason that people attempt to get credit cards these days is because of the rewards that they provide. If this is you, you will want to consider these items when shopping around for that perfect rewards card:
1)Points v. Cash v. Miles: Some credit cards have a points reward system, while others have a cash back or airline miles system. These programs are not all made the same, and you will want to make sure that you sign up for the card that gives you the maximum comparable dollar-value in rewards, even if the rewards you receive won't be in dollars.
2)What's the Caveat on the Bonus? Many card issuers are now offering sign-up bonuses for getting their card to incentivize you to use their business. However, there are always rules attached to these bonuses.
For instance, many cards will require that you spend $3,000 to get $200 back (or something like that) within three months. Make sure that you don't get a card for the sign-up bonus if you can't meet the requirements in time!
Determine Your Approval Odds First
It’s not that hard to pick a great credit card if you will just do a little research beforehand. These days, there are plenty of awesome cards out there with great features and rewards to suit almost anyone who is searching.
However, please make sure before you apply for any credit card that you consider your approval odds. Remember, the better cards will require a higher credit score than the cards that aren't as good. Still, if you are likely to be denied when applying for a great card, it's better to apply for a good card and take some time to build your credit.
Having multiple hard pulls on your credit in too short of a period can really hurt your credit score if you aren't careful. So, make sure that you do your due diligence before applying for that card that you want. Consider all the topics listed above in tandem with your current credit score and you should be able to make a good decision!