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Choosing the right credit card may not be as easy a task as it seems to be. With so many different parameters to take care, there isn`t a single rule that one can blindly follow in choosing the right credit card. However, a balanced decision as far as choosing the credit card can be taken by considering a few things around which credit cards work. Here are some aspects of a credit card that the card holder should try to look at before choosing the one that suits him or her.
The first step to choosing the right credit card should be based on the interest rate on offer. It also depends on the cardholders` spending habits. A cardholder, who is used to carrying revolving debts, should always opt for a lower interest rate, to ensure that he doesn`t pay a lot of interest on the outstanding debts. On the other hand, a card holder who pays his outstanding balances on time can go for other credit cards with higher interest rates, because such cards also come with beneficial rewards which are not offered in low interest credit cards. The same holds true also for balance transfers, where the APR after the introductory period is critical.
It is important to choose a card which offers suitable rewards. Someone who travels a lot will benefit from travel cards that offer air miles and discounts at restaurants and hotels. On the other hand, someone who needs credit cards for domestic spending will benefit from cash back rewards. There are other specific reward programs like frequent shopper reward cards for those who shop a lot. Rewards also come with terms and conditions and one has to be cognizant of those.
Never choose a credit card that charges exorbitant fees. Fees could be levied on credit cards in many ways. Cardholders should be aware of different types of fees including penalties like late fees and over the limit fees. High annual fees and cash advance fee could also be charged on credit cards.
Good credit cards come with fraud liability which will allow cardholders to deny fraud charges on their credit cards. Similarly, hotline to report lost or stolen card and travel insurance are offered on many cards. Such features make using a credit card more convenient and hence should be favored over other credit cards.