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Choosing credit cards is a trickier deal than most people expect to be. This is because there are a lot of changing factors that influence the credit card customers in the spur of the moment. Most credit card customers do not think about the long term when choosing credit cards, and are instead worried about short term gains.
Most credit card customers choose credit cards based on the rewards on offer. It is not uncommon to find customers accepting a card with 20% APR and cash back offer, in favor of a card with 13% APR and no cash back. This is a good deal for those customers who pay off their monthly bills in full before the due date. For those credit card customers who have a revolving debt every month, this is a recipe for disaster as the interest will constantly be building up and would be far more than the savings made on the cash back offer.
Many credit card customers give a lot of importance to the discounts they would be getting with the new credit card account. However, they should look at it as a marketing strategy more than a reward. Often these discounts will make customers spend more in order to avail them, which isn't what they would have expected when choosing the credit card.
A lot of credit card customers need balance transfer for some relief from the accumulating high interests on their outstanding dues. Many of them only look at the introductory rate and promotional period when choosing the credit card. For example, customers are more than willing to accept a card which offers 0% APR for 18 months. However, credit card customers do not consider the fact that after the 18 months, the interest rate could rise steeply to 25% which is a lot more than their current credit card's APR.
Not checking out all the details of the card like fees, APR terms, introductory periods and reward limits, mentioned usually in fine print is a grave mistake, because these terms undo the rewards that the customers are expecting from the card.
Lower credit limit allows customers not to go overboard. But at the same time reducing their own credit line adversely affects their credit rating too and also chances of getting slapped with overdraft fees.