How Do Credit Cards Differ by Company?
Choosing a credit card from among the many offers available to most consumers is a complicated and sometimes frustrating process. The decision about which card to apply for will impact what it costs you to use a credit card and how you'll manage your finances. Even similar types of cards from different companies can have significant differences once you learn how they actually work.
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Rates
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Among the key differences between credit cards from one company to another are the interest rates they charge. Most companies offer a range of rates, including fixed and variable rates. When those rates can go up, and how high they can rise, is a matter of each card issuer's policy and the legal limits imposed by state and federal government. If you plan to carry a balance on your credit card, selecting the company that offers the lowest long-term rates is the best way to save money. Even a small percentage point difference can mean huge savings over time.
Fees
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Credit card companies also have their own systems in place for charging fees. Some charge annual fees on all of the cards they offer, while others reserve such automatic fees for premium cards. Other fees that vary from one card issuer to another include late fees for missing a payment, closure fees when you cancel your account, balance transfer fees for consolidating debt from another credit card, and foreign usage fees that apply whenever you make charges in another country. Look for a card company that has low fees in the areas you care about, and find a card with no annual fee if possible.
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Acceptance
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One of the most important practical considerations for credit card users is how widely a given company's cards are accepted. Some merchants, especially small retailers and online merchants, only accept one or two major brands of credit cards, leaving others with few payment options. Among the major credit card brands, some have wider acceptance than others because of the fees they charge merchants. Before deciding on a credit card company, make sure the places you plan to use it most accept it, or even a card with low fees and interest rates will be of little use to you.
Special Features
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Credit card companies strive to make their cards stand out by offering rewards programs and exclusive member benefits. Rewards include airline miles, cash back and shopping discounts, with many companies offering a combination of rewards to attract a wider range of users. Member benefits include special early ordering for event tickets, access to airport clubs, and monthly reports to credit bureaus to help raise your credit score quickly as you make on-time payments. While some special features are only available from credit card companies that charge annual fees, others are available at no cost and can help you make the decision between two or more otherwise similar companies.
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