How to Compare Credit Card Issuers
Choosing the right credit card can be difficult. There are many different fee structures, interest rates, rewards programs and incentives for the potential borrower. Fees are not the only thing to consider when searching for a credit card. The integrity and customer service of the credit card issuer are other important components, and a responsible bank can save you more time and money than a lower interest rate. Before selecting a card, compare credit card issuers and rates.
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Instructions
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Decide how you will use the credit card. Is it for everyday purchases, big purchases, or emergencies? If you plan to use it for large purchases, look for cards with a higher limit, as well as cards that offer rewards, such as airline miles or reward points. If you plan to make smaller purchases, a lower limit will work, but make sure it's not so low you might accidentally exceed it. Speak with your bank about what credit limit they believe you can receive. In general, a $1000 limit is a good starting point. Rank the issuer based on the limit it indicates you will receive on your credit card.
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Visit the websites of major banks such as Wells Fargo, Bank of America and Chase, and make note of their credit card offers. Make a chart of the different offers and separate each bank's cards into two columns. Label Column 1 "No Annual Fee" and Column 2 "Annual Fee." Make additional columns for annual APR (interest rate), as well as fees charged for balance transfers, cash advances, late payments, exceeding the credit limit, increasing the credit line, and return items, as well as any other fees you want to compare.
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Make a list of each card you're interested in and note their APRs (Annual Percentage Rate) for purchases, balance transfers, and cash advances. If you plan to take out cash, make sure you choose a card with a lower cash advance APR. If you plan to carry a balance from month to month, choose a card with a lower purchase APR. Next jot down the introductory APR and fixed vs. variable APRs. Choose a fixed APR if you can lock in a low rate. Most cards offer only variable APRs, and thus, you should choose the one that is the lowest and least likely to fluctuate.
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Understand and know the different kinds of fees, including annual fee, cash advance fee, balance transfer, late payment, over-the-limit, credit-line-increase and return item fee. Mark these on your list. Look for the information online, or call the bank and ask them to go over the fees with you. Once you know these basics, start calling the various banks you are interested in doing business with. To compare the credit card issuers, make sure that they offer a dedicated number that you can call with questions. Note when their hours are, and if they have email and online chat support.
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Do research on the credit card issuers. Make note of their customer service, how likely they are to raise interest rates in a given year, and how they respond to complaints like fraudulent charges. Visit the Better Business Bureau's website and read the comments. Ask questions about their policies regarding credit line increases and interest rate decreases. See if they offer free credit protection against fraudulent charges, and then make note if they offer phone, text, and email fraud alerts. Go with a larger bank if you want vigilant service for fraud alerts. Compare issuers on their customer service, and rank them from top to bottom.
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Understand what a good APR rate is. Unless it's the only card you can get, don't go with an interest rate higher than 27%. Try to get cards below 20% APR, and if possible, 13-17%. Know your credit score before trying to negotiate or seek interest rates. See what rates the different banks are offering you based on your credit score.
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Compare your credit card issuer customer service list with the credit card rate list and see how the issuer stacks up against their credit card offers. Make the choice that allows you to feel confident in your issuer and that gives you the best interest rates. If you're having trouble deciding, always go with the bank that offers the best in the way of customer service and responses, as having constant contact with a bank can save you time and money.
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Tips & Warnings
Credit card reward programs can be a great way to get free flights, new electronics, or free dining. However, don't rush into getting a card that offers rewards. The downside is that many of these cards come with annual fees, and unless you use your card often, you will end up paying more in annual fees or interest than you will receive in benefits.
Make sure that the credit card company you do business with is reputable and secure. There are many scams on the market offering extremely low interest rates to desperate borrowers. Make sure that all websites and banks you use are legitimate.
