Credit cards can be very useful, and if used right they can improve your credit while saving you money. However, if you don’t look carefully at the different credit card options you could wind up with a card that is a poor choice for your spending habits and costs you money. With the hundreds of cards out there, it can be difficult to find one that works best for you, but looking at a few simple card characteristics can help.
Annual fees
Before signing up for a new card, check to see if there is an annual fee. For most people, a card with an annual fee is waste of money. While these cards tend to have better rewards or some other advantage, few people spend enough each month to make those rewards offset the cost of the card. Unless the card gives you a great deal on something you would be purchasing anyways, like airline miles if you travel often, it is best to avoid cars with fees.
APR
It is important to know what your interest rate is on a card, especially if you’re planning on carrying a balance from month to month. If you’re a bit of a risk-taker and have a card with an introductory 0% APR, you can even take money out to invest in other places, which can make you a little extra before the rate goes up and you need to pay the card off.
Remember, though, that even if the interest rate is fairly low, it’s best not to carry a balance and avoid the extra charges. Giving the credit card company money in interest should be avoided if at all possible. However, if you know you might have a balance on it from month to month, you need to pick a card that has as low of a rate as you can find.
Rewards
Many cards have rewards for using them, such as cash back, air miles, or points to use in their company store. Look at the different reward options and find a card that has a reward that will be useful to you. Find out if you can get bonus cash back or air miles for shopping at a specific place where you often spend your money, as many cards will give extra rewards for gas stations or stores they are affiliated with.
Before you choose a credit card, looking through different options and finding one that works best for you will save you money. Whether you need a card with lots of rewards but carries an annual fee or a card that’s free and help you slowly add up miles so you can fly wherever you need to go or anything in between, there is a card that matches those needs. You just need to find it.
Marshall Graham is a financial and insurance claims consultant from Great Britain. He recommends that you check online for cheap home insurance and coverage comparisons to get the best value for your money.