A credit card can be considered a chainsaw, you will find that it is really handy, but this can in fact cause so much damage if being used improperly. For this reason, you should choose a credit card in a wise way. In this article, you will be able to learn some things that needs to considered on the selection of a credit card.
Its Interest Rate
On a credit card, you will be able to see the interest rate appear an the Annual Percentage Rate (APR). This can be a fixed rate or it could be a variable that’s being tied to another financial indicator that’s commonly known as prime rate. In a fixed rate card, you will learn what is going to be the interest rates for every month and cards that have variable rates could fluctuate. But you should be aware that cards with fixed interest rates could be changed based with certain triggers like the card payment or cards that are late or when you go over your limit. It can also be due to the case where the issuer of your credit card is going to decide changing it.
Limit on Credit
This actually is the amount of money to which the credit card issuer is going to be willing to let you borrow. They will base it with your credit history. You would not want to be in a situation to where you are close in maxing out the credit limit. This in fact can do some damage to the credit limits of customers towards an amount that’s lower than its current balance. There’s also going to be penalty if this will ever happen.
Its Penalties and Fees
There are various ways as to how a credit card issuer can make money off you. The common charges will include fees on the transactions like balance transfers and cash advances or through simply asking on increasing your credit limit or in making payments through phone. There are various penalty charges when paying your bill late or if ever you go over on your credit limit.
See to it that you choose credit cards with reasonable fees. On the balance transfers, be sure to look for offers that have no transaction fees and also one that have 0{3c10558e056e7b129236fa88df00dfd68b9f11fcf272c3eb40b422cb892500dc} interest on its 12 months. Avoid also paying extra on their reward programs.
Incentives
A lot of card issuers mostly offer a reward program that offers a reward program for customers so they will be included in using their card. Be sure to look for a program which will offer flexibility like rewards and cash or travel that you could use and easily earned and can be redeemed.