How to Choose a Credit Card

A credit card is a card that is issued by banks and other financial institutions, retailers or chain stores and permits a person to make purchases of consumer goods and services on credit. In fact, it has grown to be the trendiest mode of payment in the United States and has led to a considerable boost in the levels of consumerism. There are several kinds of credit cards to choose from and several things have to be kept in mind while choosing one that's right for you.

Instructions

Difficulty: Moderately Easy

1. Know that several kinds of credit cards are available. There are travel and entertainment cards such as Diners Club card, bank credit cards such as Citibank and Standard Chartered and retail stores card such as Macy’s and Mobil. Compare their features before choosing one.
2. Think about how you will use your credit card. If you are sometimes tight on bank balance and may not be able to pay your credit card bills in full every month but instead paying only minimum amount, you will want to choose a card with a low interest rate. If you expect to use your card to get cash advances, choose a card with a lower interest rate as well as lower fees on cash advances.
3. Verify the APR (Annual Percentage Rate) and the periodic rate for purchases, cash advance and balance transfers. See whether or not the APR is worth choosing by comparing it with the monthly rate schemes.
4. Ask if there are interest free or grace periods and whether they're grouped with the cash advance plans.
5. Figure out whether a monthly payment or periodic payment plan suits you. If your purchases tend to be heavy, the periodic plan might be better.
6. Find out whether the rate or interest (APR) is fixed or variable. If it is variable, make sure to check out the range of variation and go for the fixed if your purchases tend to be moderate.
7. See whether the card you want to opt for is nationally and regionally acceptable or will facilitate purchases only in some specific store or state.
8. Confirm whether they have attractive packages with certain levels of credit such as travel and accident insurances, guarantees or warranties, cash discounts or scratch cards combined with credit card purchases.

Tips & Warnings

• Verify the method used to calculate the rate of interest on the amount of credit issued. Choose the one that is best suited for your needs as it can make a considerable impact on the final amount you are supposed to pay to settle the credit account.
• Ask for a cut on the interest rate if you are a regular card user and have been fairly accurate in repaying your dues. Also, ask for a waiver of the annual fee if you have a good credit standing.
• Read the fine print before applying, and confirm all the fees that are charged by the credit card company under certain circumstances.
• Limit the number of credit cards you have in order to keep a check on unnecessary expenses and also keep track of all the expenses incurred through credit cards.