Picking a Card
Which card you should choose, and why.
There are a wide variety of cards to choose from in the market. However, you should choose the one that fits your needs best. Two credit cards may look exactly the same, but their costs or benefits to their holders may be very different indeed.
The first things you should take into consideration should be:
- Your balance: To be paid 'in full' or 'in terms'?
- Your APR: Is it 'fixed' or 'variable'
- Introductory rate: Under what terms?
- Fees
- Calculation
Below is an explanation of why the above conditions are important when choosing a card.
Your Balance
First; about how you will be paying your balance.
If you will be paying your balance in full, the APR of the card will not be of much importance. However, if you plan to leave some of your balance for the months to come, you should take the APR seriously.
Your APR
If APR is important to you, due to reasons stated above, then you should know what the Terms of Agreement states about whether your APR will be 'fixed' or 'variable'. Because a variable APR will increase the uncertainty in your future costs. One other impotant thing about variable APRs is to what index they are fixed.
The Introductory Rate
If the card is offered with an introductory rate, you should read the Terms of Agreement very carefully to understand the conditions that result in the termination of offer - as well as what exactly happens when the termination comes into place.
Fees
Fees are also among important reasons to choose (or to not choose) a credit card. Some credit card companies offer lower APRs but higher fees, when some others do just the opposite. Therefore, you should be careful about all sorts of fees attached. The annual fee, and the minimum finance charge must be among the first you look at.
Calculation
How your credit card company calculates your minimum payment and various charges is also very important. Because, if you have a monthly balance of, for example, $1000, your minimum payment, finance charge, interest will not necessarily be the same for all cards - even if they have the same APR!
If you are planning to transfer some balances to this new card you are trying to pick, you should be aware of the fees and conditions that your new credit card company will be applying. Because, almost none of these offers are fee-free.