Getting a new credit card deserves some comparison shopping no matter how good your credit may or may not be. Comparison shopping enables you to find the best available deal and that is what you really want.
Interest rates and credit card terms will vary from card to card; these variations make a considerable difference to your financing budget. You should always shop for a card with the best terms and interest rates.
When comparison shopping for a credit card here are some tips to help you find the best credit card for your use.
Avoid the high-interest rates.
Although credit card companies reveal their interest rate in various ways, you want to look at their APR or Annual Percentage Rate. The APR best indicates the actual interest you pay for interest, transaction fees and other charges, per year.
Avoid low introductory rates.
For some cards this is simply a teaser rate, since after several months the rate of interest will drastically increase. Sometimes these advertised rates target certain individuals with a high earning income. This can mean an unpleasant surprise for you as the first bill arrives, since the card company may charge a higher rate to those who may not qualify as their target customers.
Learn and understand interest calculations.
Generally, a bank charges interest on an average daily balance. For instance, let us say you charge $1,500 to your credit card, while only paying $1,200 on its due date. When you get the bill, you will find that the bank, using the average daily balance charges you interest on the total amount as an average daily balance from last month, rather than only on the $300 still owing.
Evaluate the grace period.
This is the time between the date of purchase and the due date for billing and is an interest-free period. Generally, it is available only to customers who do not carry a balance. When you pay in full monthly, you should make sure you do have a grace period. If you do not, you pay interest from the purchase date. When you carry a balance, having a grace period is no longer important.
Avoid high annual fees.
Some credit card companies may charge you a flat fee as well as interest and other charges when you use their cards. Some companies do not. When you pay off a monthly balance, you need a card with no annual fee. When you carry a balance from one month to the next, having a card with an annual fee and a low-interest rate is better than having a card with no annual fee and high rates of interest.