With scores of different types of credit cards out there, how do you find the best deal?
Needless to say, it pays to already have good credit in order to get a good credit card offer. But finding an attractive credit card goes beyond simply having excellent credit. Since the credit-card industry is so competitive, it pays to seek out the best current offers and ensure you are paying the lowest possible interest rates and getting the best available terms too.
Here are some important things to consider when searching for the best credit card deal:
Annual Fees
Some credit cards impose an annual fee just to maintain the card, but there are still many cards that don’t have any annual fees. Fees are typically spelled out in your cardholder agreement or other information from a credit card issuer.
In most cases, travel cards, rewards cards, and airline cards all command annual fees, but they do offer cash-back bonuses, free flight opportunities, discounts on hotels and other incentives. Make sure you read the fine print thoroughly to determine what the annual fees are, and decide whether any benefits offered are worth it versus the annual fee required.
Fixed or Variable APRs
Bankrate.com reports that nearly 70 percent of all credit cards have variable Annual Percentage Rates or APRs. A variable APR means that the interest rate on your card will fluctuate based on market conditions. When the index to which your card is tied goes up, your credit card rates go up.
If you choose a fixed-rate card, you are generally guaranteed that interest rate throughout your credit card agreement or through the end of the promotional offer. But even with a fixed-rate card, a credit card issuer can change your rate by giving you the proper legally required notification.
Again, make sure you review the fine print so that you are aware of any interest rate fluctuations, and know when any fixed-rate offers are going to expire.
Grace Period
If you pay off your entire statement in full before the end of the grace period, you won’t be charged interest on your balance.
But if you only make the minimum payment or a partial payment, you will see some interest charges posted to your account at the end of the grace period.
If you’re the type of person who tends not to pay off the entire balance in full each billing cycle, choose a credit card that has a long grace period and make sure you post the payment date on your calendar to avoid late charges.
Zero-Interest Offers
Many credit card issuers attract new customers by extending a zero-interest offer where the cardholder pays no interest on all purchases or balance transfers for the first six to 12 months. Some 0% offers can last as long as 18 months.
If you are planning to coordinate a balance transfer or want to make a larger purchase that won’t collect interest, look for a card with this type of promotional offer but make sure you are able to pay off the entire balance before the promotional period is over.
Balance Transfer Fees
Initiating a balance transfer is usually a fairly easy process, but each credit card issuer will impose a fee for each transfer. This is usually a percentage of the amount transferred, and can vary by issuer. In general, balance transfer fees run about 3%. Some are as low as 2%; others are as high as 5%.
If you plan to transfer large balances, make sure you’re aware of how much you will be paying in fees, and seek out the lowest rate possible when selecting a credit card.
