Does Your Card Measure Up?
A dependable credit card is a dying breed. Nevertheless, from time to time, it's a good idea to do a credit card comparison. If you receive an offer for a credit card, before you sign up, do your homework. Consider the following:
Will You Be Paying Off the Balance Every Month or Carrying Balance?
We all have good intentions, spend only what you can afford and pay off your card each month, but things happen. Credit card companies are counting on you keeping an account balance. They want you to pay finance charges and interest rather than grant you an interest free loan. If you carry over a balance on your credit card, you're not alone.
Check Your Credit Score
Before you begin your comparison search, learn what your credit score is. FreeCredit.com lists your credit scores from the top three credit bureaus and charges a low fee to disclose your final score. Your credit may be excellent, good, fair or bad. It's also important to periodically check your credit score in case of identity theft or errors.
Let Your Internet Fingers Work for You
It's important to search the Internet for cards offering low interest rate and special card member awards. Compare the offers side by side. It's easier to look for similarities, not differences. If you are a college student who has no credit in your name, you'll likely have a low balance approval. There is a silver lining. After you prove you pay your credit card on time, you can ask for a higher credit balance. If you're leaning toward a higher balance credit card (for travel, lodging and entertainment) you'll need good credit score to get a high balance approval. Even car rental agencies are turning away customers who have a low credit score. Loss of good credit is a major problem.
What to Look For in a Credit Card
If you're planning on transferring the balance from your current credit card to a new card, offers with low or 0% introductory rates (usually offered for a minimum of six-months) and a lower APR might be good. If you plan on keeping your credit card for an extended period of time, a fixed, low interest rate may be better. This gives you the benefit of knowing your interest rate right away. If you're interested in card member rewards, keep in mind credit card issuers have no legal responsibility to keep the reward programs they advertise. It's not a good idea to rack up huge amounts of reward points hoping to take that trip to Bali. If your credit rating slides for whatever reason, its common practice for credit card companies to raise your interest rates. You'll find cards of all colors and design. Here's an idea of what else to look for:
- Does the card charge an annual fee? Usually not a good idea
- Frequent flyer points ─ scary with the airlines changing their rules almost daily
- Earnings that you can apply toward a new automobile
- Cash back bonus
- Zero fraud liability
- Points good for merchandise or gasoline
Do your homework and happy hunting!
