FACTORS TO COMPARE CREDIT CARDS

Credit cards play an important role in our daily lives. This is because we cannot carry cash wherever we go. That is why these cards that are also called as plastic money come in very handy when we want to buy something at a store or any other place. Credit cards have revolutionized the way we use money and have multifarious advantages. This is why it is important to learn about them.

However, in contemporary times, there is a wide variety of credit cards from which we can pick and choose. Hence, this can lead to a large degree of confusion that needs to be sorted out. Here we discuss the various factors that can be used to compare credit cards. After reading this article, you will be in a better position to select the credit card that will work the best for you. You can also view this list of recommended cards should you so desire.

THE UBIQUITY OF CREDIT CARDS

Credit cards have become ubiquitous in modern times. Nobody likes the hassle of carrying cash when out on travel, holiday or business. Hence, choosing the right credit card is crucial otherwise it will lead to repercussions with financial implications. Hence, given the current scenario, it becomes extremely important that you embrace the ubiquity of credit cards and learn about what factors can be used to compare them.

WHY CREDIT CARDS ARE USEFUL

From the above discussion, it is clear that credit cards are extremely useful and can be used to their maximum advantage. They will not only help your financial transactions go smoothly but will also spare you from the unwieldy and cumbersome procedures of using cash for all your needs and purchases. This clearly reflects its utility and functionality.

HOW TO MAKE A COMPARISON

1.     Types Of Cards

There are mainly three types of cards. These are secured cards, regular cards, and premium cards. Secured cards are meant for people who have no credit or bad credit. They require a security deposit.

Regular cards don’t need a security deposit but have fewer features than premium cards. The credit limits for regular cards are higher than secured cards but are much lower than premium cards.

Premium cards are of three types- gold, platinum, and titanium. They offer much higher credit limits and also have extra features like emergency service or travel insurance.

2.     Interest Rates

Analyzing interest rates is one of the best and most important ways in which you can compare credit cards. The interest rate that you pay yearly is the Annual Percentage Rate or APR. This is basically the monthly rate that is multiplied by 12.

However, there are different facets to these rates as some of them are introductory rates, other rates depend on the amount of balance that you maintain on the card and some rates keep changing with the different ways in which you use the card.

For example, cash advances generally have higher interest rates and balance transfers use different rates than the APR. You really need to read the fine print on the interest rates before deciding which credit cards will work the best for you.

3.     Grace Period Or Billing Cycle

The billing cycle or grace period is very important as this is the deciding factor as to when you will start paying interest on your cards. Choose the card that has a longer grace period as it will enable you to have a loan for a much larger duration of time. Just keep in mind that all other factors must remain the same with a higher grace period. This will help you get the best deal available among all the credit cards.

4.     Fees

Most credit cards have annual fees but they aren’t detrimental to your interests as they provide you with numerous benefits. For example, some credit cards will charge higher fees for giving you travel miles but this can be beneficial for you if you travel a lot. In this way, you can make a large amount of savings. So you just need to compare the fees between cards and see what you get for the offers available.

5.     Know What Is Your Finance Charge

The finance charge is the dollar amount that you have to pay to use credit and it partly depends on your Annual Percentage Rate (APR) and also on your outstanding balance. There are different methods that companies use to calculate the outstanding balance and the methods that they use can cause great changes in the finance charge. So you need to know in advance if there is any finance charge and how it is being calculated.

6.     Expiry Dates And Special Offers

Many of the introductory offers for your APR and other important features like cash balance and balance transfer fees will expire after a certain period of time. Most of this will be mentioned in the fine print that is marked with an asterisk in the terms and conditions. Hence, you need to read the expiry dates for the same and the special offers that come with it so that you are not left groping in the dark when you see an inflated bill.

7.     Features For Cash Advance

Cash advance generally has a much higher interest rate than normal cases. Hence, you need to know the methods of access for a cash advance before you can compare the different rates in various credit cards.

8.     Minimum Balances And Penalties

Some credit cards require you to pay a minimum monthly fee for using the credit card. It also has a specified time period in which you need to make the payment failing which a penalty will be charged. So you need to choose the credit card that has the minimum monthly fee and penalty that can help you get the best returns on your investment.

9.      Credit Limit

Generally, the credit limit is decided by your credit history, but some of the credit cards have a credit limit that is decided in advance.

10. Points And Rewards

Most modern credit cards have points and rewards that you can earn while using them. These are generally available for a fee but can also be found in credit cards that offer the same without charging any fees.

11. Cash Rebates And Incentives

You can get cash rebates and incentives on car rentals, travel discounts, purchases, and access to online accounts. These can help you get the best deal for the money that you invest.

12. Specialization

Some cards are specialized and have a select target market. For example, some cards are meant for students, travelers, and businesspeople. They are accordingly customized to fulfill the needs of the ideal clients that they wish to serve. This is why the specialization of credit cards is very important in today’s age.

HOW TO USE THS INFORMATION TO YOUR ADVANTAGE

You can use these parameters to get exactly what you want.

CONCLUSION

These are the factors that you need to use to compare credit cards. Just go through them and select a card that works best for you.

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This article was written by Poonam Gill.