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There are some interesting points to consider when you are choosing a credit card. These are often ignored by a lot of people and that often leads them to worse situations and a bad credit history. Ideally you shouldn`t be looking for more than one or at most, two credit cards, as it becomes unmanageable after that. Here are some things you need to consider when you are choosing your credit card.
High APR works both ways. If you are someone who wants motivation to avoid getting into outstanding debt, you can go for a high APR credit card which offers other rewards. On the other hand, this could backfire especially if you are someone who has gotten used to rotating debts. In such cases you should go for a low interest rate credit card, that doesn`t sting you with high interests. Some credit cards have varying interest rates and that is where you should be extra cautious. Balance transfer credit cards for example, will have low interest during the promotional period followed by an increase at a later stage. You should therefore read the fine print of the credit card thoroughly before you choose your credit card.
There are some credit card companies, you can trust, will not charge hidden fees. For example, quite a few major credit card companies completely waive off the currency conversion fees including the 1% that has to be paid to payment processing networks, when you spend on your card in other countries. On the other hand there are credit cards that charge as much as 3% currency conversion fee and other types of fee like cash advance, where you are charged extra for withdrawing cash from ATMs. You need to choose a card that charges you as less as possible. Hidden charges and exorbitant penalty amounts could often add enormously to your outstanding debt.
A credit card that offers $100 rebate if you spend $600 in the next 3 months could be useful just before the holiday season. However, a credit card that offers loyalty points but has a cap on the number of points you can redeem might not really be useful. Similarly credit cards which offer discounts only for milestone expenses might not really be as rewarding as you think. So weigh the utility of the rewards instead of being carried away by them.