Choosing A Best Credit Card

It is true that credit cards are indeed a very simple way of borrowing money, but when choosing a credit card for yourself there are a couple of things you need to consider first. With a little research and some good judgment, you could save up on a lot of money in fees and interest.

Like most other people, you use your credit card to borrow money and don’t plan on paying off your monthly balance entirely, and then it is time to look for a credit card that has one of those introductory 0% interest rates on purchases. Here are a couple of pointers to help you choose a credit card:

• Balance Transfers – If you have balance on your credit card, then you can convert this into a 0% deal. However, this deal will only be applicable for a certain amount of time or until the balance is paid off in full. So, if you are planning on making any purchase on your credit card, you should first check to see what the interest rate is before you get charged. Also check if any fee is charged for transferring the balance.
• Rewards – There are many credit card offers and incentives like loyalty points and cash back that are offered by many credit cards today. These are offered to attract new clients, as they seem like good deals. However, it is advisable to first check the rates of interest charged as the levels of cash back are generally very low and since you will be paying higher interest, this equation wont balance out. With such rewards like loyalty points, it isn’t worth paying higher interest rates if you are not planning on redeeming them or if their monitory value is relatively low. There are many credit cards with interest free periods.
• Repayments – The monthly minimum repayment amount on most credit cards range anywhere from 2% to 5%. If you choose a credit card that has low minimum monthly repayments, then you should know that it could take you a pretty long time to pay back that balance, which in turn will cost you more in the bargain. However, if at all you miss a monthly payment deadline, then you will probably be penalized. The best way to avoid the risk of a missed payment is to go ahead and set up a direct debit for the minimum monthly payment amount However, if the funds are insufficient in order for the direct debit to be paid, then you will have to face the penalty fee.
• Cash – If you feel the need to withdraw cash from your credit card, then first check the rate of interest being charged. This will always be higher than the interest rate applied for ordinary purchase