How To Choose The Right Credit Card For You

Today credit cards are an essential part of our lives. But, there just seems to be so many companies willing to give us a credit card. So, how can you choose the right credit card for you?

The Right Approach

Before you have done anything else, you should approach choosing the right credit card for you the same way you would decide on any purchase – you need to find the cheapest, which also serves all of your needs. In making this decision, you need to think about:

• what do I need to use the credit card for?
• will I pay my credit card bill in full each month?

Both of these, you will find, play an important role in choosing the right credit card for you.

What do I need the credit card for?

Determining the reason why you need a credit card is vital – because of you don’t need it, maybe you shouldn’t apply for a credit card. Most people need credit cards:

• to borrow money against, using the credit card like a loan;
• to pay for their weekly shopping;
• to make payments on the Internet;
• to pay for their petrol or entertainment;
• to use when they go on holiday.

If you think one of those reasons applies to you, then you need to shop around and choose the right credit card for you.

Will I pay my credit card bill off in full each month?

This is going to have to be the most honest question you ask yourself.

If you plan to pay off your credit card in full each month, then you can really shop around before choosing which credit card is best for you. However, if, like most of us, you realize you will not be paying off your credit card bill in full each month, then which credit card to chose becomes very important – and you’ll need to pay particular attention to:

• annual percentage rate (APR): the compounded interest charged on credit cards;
• annual fees : some, but not all, credit card companies charge annual fees. Keep in mind that even if the credit card has a lower APR, when you include the annual fee the charges could be higher.
• cash withdrawals : if you are intending to use your credit card to make cash withdrawals, make sure you check and see whether you’ll be charged interest from the day you withdraw the money (most likely), or your statement payment date.
• loyalty schemes : a number of credit card providers now offer their customer loyalty bonuses. If you intend to use your credit card often, these bonus points can add up quickly – so choose a credit card that has one!
• balance transfers : always make sure that you chose a credit card provider that will allow you to transfer your outstanding balance to another credit card company if you want to.

Finally, never be in a hurry to apply for a credit card. Remember, there are lots of credit card companies looking for you to choose their credit card – so shop around and get the best deal you can!