How to Choose a Credit Card

Video Transcript

"Hi! My name is Maria Enomoto, I'm from Consumer Credit Counseling Service of Ventura County and today we're going to learn how to choose for a credit card. First thing that you need to answer to yourself, it's for what you need the credit card, what is your main need to cover by deciding to have a credit card. And after that, you can start shopping around to see what credit cards are on the market and you will be able to find the best that fits with your needs. Some of the things that you, some of the questions that you need to ask is, if you're going to be charged for an interest rate or not, some credit cards offer you a promotion of a zero percent or three percentage, a small percentage rate only at the beginning. So you will need to make sure that you're going to be able to pay off your balance. With that lower interest rate or if that's not going to be possible, it's good for you to know what is the interest rate that they're going to have after that promotional rate. Another thing that you will need to know probably it's how, is the interest rate calculated, if it is a compound interest and how many balance cycles they're going to use in order to calculate your finance charges. Another thing to make sure, is if you're going to be paying some fees, some credit cards will charge annual fees, so at the beginning probably you will not notice, or sometimes when you start with a credit card they don't charge you the first one but then after a year you can start paying for that. So it's good for you to know that this credit card that you are thinking about applying for, it's going to charge you with an annual fee. Another thing is, for what you're going to be using the credit card. It's for you to build history? It's for you to use it as your regular way to pay your bills, or if you're going to be transferring money from another credit card just to take advantage of higher limit, or take advantage of a better interest rate, it's another good thing to know because probably you can end with a credit card that it doesn't fit the main need for what you want a credit card."