loanbits

Pick the Best Credit Card for You

Are you flooded with credit card offers?  Every day, we are bombarded with offers in the mail and on the Internet.  How do you pick the best credit card?  Do your homework before you pick a credit card—not all credit cards are equal.  At the very least, you should consider the following:

1. Will you be paying off the balance every month or carrying balance?  Of course, it is best to spend what you can afford and pay off your card each month.  This lets you avoid paying interest and finance charges.  You are actually getting an interest free loan.  This is the ideal situation, but credit card companies are betting on a sure thing ─ that most of us will carry a balance. 
2. Use the Internet to help you search for low interest credit cards.  You can search by type of card, by credit quality (your credit may be excellent, good, fair or bad), or by bank or issuer.  Compare the offers side by side.
3. Are you searching for a card offering low interest or one offering additional perks such as: frequent flyer points, cashback bonus, zero fraud liability, points good for merchandise and travel and even earnings that go toward a new automobile.  You’ll find cards of all colors and design: platinum, gold, blue and green.  Does the card you’re interested in charge an annual fee?  It may be worth it to pay the fee if you get the goodies you want, however, annual fees are usually not a good idea.  It’s also risky to rack up a huge number of reward points and wait to use them for something special. Credit card issuers have no legal responsibility to keep the reward programs they advertise.
4. Are you planning on transferring the balance from your current credit card?  Offers with very low, or 0% introductory rates (usually offered for six months) and somewhat low regular APR can be a good thing.  Normally, individuals with good credit can get approval for these cards.  If you plan to own a credit card for an extended period of time, a fixed, low interest rate card might be best for you.  With a fixed, low rate credit card, you know up front what your interest rate will be.
5. If you travel frequently and need a higher balance credit card, you’ll need a good credit score to get approval.  If you’re a college student who has never had credit in your name, you’ll most likely have a low balance approval.  When you can prove you pay your credit card on time and have acceptable financial habits, you can ask for a higher balance.
6. Credit card companies look at more than your credit history.  Let’s say you had a 9.9% credit card for five years.  You unexpectedly incur six months of serious illness and major doctor and hospital bills.  You’ve had two late charges on your credit card, are behind on your car insurance and the utility companies are badgering you.  The credit card company notifies you that they are raising your interest rate to 12%.  Can they do that?  Yes.  It’s a common practice.  Some credit card companies will work with you if you call them with a foreseeable problem, others will not.  Loss of good credit is a major problem.

Picking the best credit card for you can be difficult. It’s important to do your homework.  If you need help, ask questions at www.loanbits.com, and we can help!