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It is no more a secret that credit cards have become an indispensible part of life. Having a credit card is no more considered luxury; it has become a necessity. Whether the credit card turns out to be your friend or foe depends on the type of card you opt for. Choosing the right option for your needs is easier said than done considering the number of cards that are available in the financial market today. However, this need not necessarily be a time consuming task if you keep a few basic factors in mind while making your choice.
Factor #1: Type of cards
There are varieties of credit cards offered by banks and financial institutions. It is imperative that you understand how each one of them works before signing up to avail them. Ranging from standard to prepaid and premium to charge cards, there are a plethora of alternatives for you to consider. If you have to make the right choice, then, it is imperative that you have clarity on the reason for which you intend to avail the card. Do you want to make regular purchases on it or is it for just online shopping? Are you looking for a card for balance transfer? Answer these questions to narrow down your choice.
Factor #2: Promotional offers
The financial market is highly competitive today and banks are bending over backwards to ensure they attract a lot of customers. In an effort to gain an upper hand over their competitors, most banks are offering some irresistible promotional offers if you sign up with them. Opt for cards that come with promotional offers that last at least six months or more if you want to reap the benefits of the introductory programs.
Factor #3: Annual Percentage Rates
The APR should be one of the topmost factors to consider when choosing the credit card for your needs. It is this rate that determines how much interest will get accrued on the amount you spend using the cards. While signing up for credit cards, the APR during the promotional period will always be very low. However, don`t fall prey to this rate. It is the rate after the introductory period ends that matters. Hence, ensure you find out the APR that will be applicable after the promotional period ends and make your choice.
While these are the main factors that you should consider, there are others as well like the fees associated to the card and the grace period that also make a difference. Consider all aspects well and make a well informed decision to stay out of debt traps.