4 Things to Compare When Selecting a New Credit Card

If you’re looking for a new credit card, you need to take time to make sure it’s the best option. There are many credit card companies out there trying to compete for clients. This is a good thing for you because you can benefit as a result of their competition. Here are some of the things you need to compare cards before you settle on a new credit card.


1- Compare Fees Charged

Certain companies charge different types of fees for using their card. Some have an annual fee that you pay at the end of the year. The cost varies from one company to the next. Most of the time, you have to pay the fee on top of the amount you owe. And in some instances, you have to pay interest on this fee also. Other types of fees include foreign transactions, cash advances, and balance transfers. Compare different types of charges across different companies if you’re trying to save.


2- Loyalty Rewards and Cashback Deals

Credit card companies want to make sure you don’t move on to another service. That is why some of them have created loyalty systems to reward you after spending a certain amount. Such systems make use of points that add up. Once they get to a specific number, you can use them to buy things. With this system, you are likely to feel more appreciated. If you don’t want a company that only takes away from you, then this is also something to consider. Compare different loyalty systems and see which one makes the most sense.


Other than the reward points, some card companies also give you cash backs. In such cases, you get cash refunds to your card. But it doesn’t always apply to everyone. Many times, it’s only when you’ve paid your balance fully each month.


3- Interest Rates

Because there are so many credit card companies, some of them are willing to charge lower rates. Doing this allows them to compete well in a saturated market. As a borrower, you need to compare as many card company rates as possible to find out what works for you. There are different rates you need to pay attention to when making your comparisons.


First, you need to look at the Annual Percentage Rate (APR). At the end of each year, there is an amount you have to pay. The amount you pay may differ based on many factors. For instance, some card companies offer introductory rates. In such cases, you may not have to pay any interest during the early months. You might also have to pay different rates based on where you spent the money. To pay the least amount of interest, you must identify a company with the lowest APR.


4- Look at Credit Limit

Finally, look at how much you can spend before your card gets maxed out. The amount you can borrow is the credit limit. Go for a credit limit that will give you flexibility. After all, there’s no need to have a credit card if you’re going to remain stranded for cash.


With so many cards to pick from, you might also want to involve a financial advisor before you settle on one. That way, you can be sure you’re making wise money moves.

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