Credit card offers resume their mailing entourage
May 3, 2011 by admin
These days, you can find a lot of promotional offers about new and exciting credit cards online and offline. It is natural to be swayed in by such benefits but how do we really know what constitutes a good credit card?
Here are some tips on choosing a credit card:
1. Introductory offers: Most credit cards come with an introductory offer; for instance, a balance transfers at zero percent interest rate. Though this is a tempting offer to pass, you should find out what it really means. Find out what the hidden story could be; they may have a very high APR after the introductory period is over. Also, the annual fees of these credit cards may be on the higher side. So weigh your options, find out how good the introductory offers are, before going in for the plunge.
2. Reward cards: Credit cards tie up with various merchants and service companies to offer ‘rewards’ on their credit cards. This means, for instance, if you are a frequent flier and regularly use a particular airline, you can accumulate airmiles that can be exchanged for the money you spend. So similarly, you can such reward cards for various things like purchase from a gas station, a book shop, from restaurants, spa etc. Look for credit card companies that give rewards that you are looking for and which can make your lifestyle easy. Check the annual fees and interest rates of these cards; you should not be paying more than what they are worth.
3. Fine print: Credit card companies like to keep the fine print taxing on your eyes. But then since it is obligatory by law, they do include it and you as a consumer, must read it, so that you are sparred from the pitfalls of falling into a trap under the veil of marketing. So read through the fine print carefully, be aware of terms like APR, minimum due, credit limit, simple and compound interest rates etc. This way, you will end up getting the best credit card that is an extension to good financing.
4. Be clear about the insurance offered: Credit cards advertise about their travel, car accident and baggage insurance. But there can be restrictions on the coverage; so do not assume that the coverage offered is adequate and you do not need health or travel insurance.
From the above, you may have understood that the key to getting a good credit card is comparison shopping. Your credit card does shape in building your credit score and rating, so you should get a card that suits your requirement.
Be disciplined about the credit card usage; do not buy credit cards just for the heck of it, if it does not really serve your purpose. If you have multiple cards, will you be spending enough on a particular one enough for it to deliver the benefits that you are looking for? If you have multiple card, you may find it difficult to manage them and may find yourself defaulting on one or the other.