Saturday, January 26, 2008

Ways to compare credit cards

There are many credit cards in the market today and they don't offer the same services. Searching out or comparing which credit cards suit our needs best can be a daunting and challenging task. What we need to consider are some factors concerning interest rate, fees, rewards programs and member benefits.

1. You need to know the type of cards that suits your need best.
Secured cards : required a security deposit and this is usually offered to those with poor credit history or no credit history. They are often offered as a means of rebuilding one's credit.

Regular cards : does not require a security deposit but have few features.
They have higher credit limits than secured cards but lower limits than premium cards.

Premium cards : (gold, platinum, titanium) offer higher credit limits and usually have extra features such as travel insurance or emergency service.

2. What is the Grace Period offered?
The time you have to pay the balance before interest is charged to the balance. This usually range from 20 to 30 days depending on the type of credit card and the issuing bank.

3. How the finance charge and interest rates are calculated?
This is the dollar amount you pay to use credit, and it depends in part on your outstanding balance and the annual percentage rate (APR). Companies use various methods to calculate your outstanding balance, and the method can make a big difference in the finance charge.

Interest rates will be described in the credit card offer as fixed or variable, although in practice, there is not as much difference as the names imply. Variable rate cards will have their APRs pegged to an index and will go up and down as short-term rates change in the larger economy. You may think you avoid the interest rate risk with a fixed rate card, but you won't. Federal law allows card issuers to change any terms of the card, including its rate, with just 15 days' notice.

4. Are there any extra fees billed annually, over-the-limit fees, late payment fees, foreign transaction fees, balance transfer fees and more?

5. What are some of the incentives and reward programs offered?
This may include cash rebates on purchases, online account access, frequent flyer miles, additional warranty coverage, car rental insurance, travel discounts, concierge services and more. If you have no credit or bad credit, you may have to work on building good credit before you are approved for a card with rewards and incentives.

These are just some of the basic factors to be considered. More information can be obtained as to How we can apply for a credit card? and which company offers interest free cards can be found by doing a search at

1 comment:

  1. Some great pointers on choosing a credit card! We'd love to get your feedback. We recently started a poll on the Worst / Best Credit Card Company. Feel free to stop by and give us your opinion. Sounds like you've got lots of experience ;)