How do I choose the right credit card?

August 18, 2009

How do I choose the right credit card?  A lot of people are asking, “How do I chose the right credit card?”  There are a few factors to consider when choosing a credit card.

First, if you have poor credit many of the credit card companies will deny you a credit card.  If this is the case, you will need to go with a pre-paid credit card.

Pre-paid credit cards can help you re-establish your credit and eventually lead to a regular credit card.

When picking a credit card, avoid credit cards that have yearly fees.  They are an extra expense and not necessary.

The best types of credit cards to apply for are rebate credit cards. They are credit cards that offer something back like skymiles or a percentage of the purchase.

Also compare interest rates.  Many companies will offer a low introductory rate for a short period of time and then raise the rate to 19% or more.  Find out what the regular interest rate will be before you commit.

Read the terms of the credit card.  Some grace periods are so short that by the time you receive the bill you already owe interest.

Don’t have all one kind of credit card.  Be sure to have at lease two different types of credit card like Visa and MasterCard, or American Express.

Lastly, know what the purpose of the credit card is for you.  If you want a card that will always be maxed out, you probably should go with a prepaid.  If you want to build up SkyMiles, or get a rebate, choose a card that offers it.  If you are going to pay your balance every month then the grace period will be most important.

I hope you now have an answer for your question: “How do I choose the right credit card?”

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Posted in Credit Cards