How To Choose The Right Credit Card
Are you at a lost with the many types of credit cards available out there? Confused with the different benefits these credit cards offer? It is actually a card holder’s market as credit card companies are clamouring for the lucrative credit card market. The high earnings from credit cards make the credit card sector an important division in many financial institutions to seize the market share and therefore, the promotions coming out from the credit card companies are aggressive indeed. With so many different types of credit cards available, how does one go about choosing the right credit card? What are the things that one should consider when choosing the best credit card in the market?
Annual Fees
The first thing most people consider is whether any annual fees are payable. Annual fees used to be the norm but nowadays, many credit card issuers waive annual fees totally with no terms attached. Some waive the annual fee for a number of years or some with waive it for as long as you comply with some conditions eg. spending X amount per year / month. In any event, don’t forget to ask for a waiver of annual fees if you have been a good paymaster.
Freebies
The amount of incentives for signing up for a credit card increases year on year. Whereas previously, freebies are as small and insignificant as a free ball pen, nowadays, freebies can even be free hotel stays. As a matter of prudence, you should find out whether the freebies are indeed free or subject to conditions. Do read the fine prints. If you don’t ask, they won’t tell you verbally.
Rewards
Does using the credit card come with tangible rewards such as rewards points or cash rebates? Check out the rewards points required to redeem gifts and compare between the different credit cards available. Some credit cards allow you to redeem gifts with lesser effort and some rewards points do not expire. Read the fine prints on cash rebates and whether the percentage of cash rebates depend on a minimum outstanding sum carried forward each month. Check where can you accumulate cash rebates – is it at selected merchants or across all purchases.
Interest Rates
What’s the APR for the outstanding sum unpaid? Check for the best interest rates available. All else being equal, you will surely want to find the credit card that offers the lowest interest rates on outstanding sum.
Balance Transfer
Balance transfer schemes offer breathing space for a credit card holder who is finding difficulty coping with an existing credit card debt. With proper management, balance transfer to a new credit card can help to reduce the interest charges. Make sure you familiarise yourself with the charges and fees for the transfer of your existing balance from another credit card.
Reputation of Credit Card Issuer
What’s the market perception and feedback on the credit card issuer’s customer service? Nothing can be more frustrating when you are dealing with a credit card issuer which is not efficient. What about their flexibility with restructuring of credit card debts? You never know when it is handy to restructure your credit card debts.
Fine Print
Finally, and most importantly, read the fine print! Read and understand what you are applying for. You only have yourself to blame if you don’t do so. If you don’t understand the terms, ask your credit card issuer to explain them to you. You have the right to know so that you can choose the right credit card for yourself.