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01 September 2011

How to Choose a Credit Card?


With so many offers and options available in the market of credit one is faced with a big question as to which credit card to take and which would be the best? Our friends and relatives have certain cards and may very often mention about the gifts and rewards they get by every use of the credit card. This is a sure way for us to also get the same card from that particular card issuer company. After some time we understand that we do not get these rewards, as we do not make restaurant outings or flight trips frequently. What then?
What may be good for one individual may not be relevant for the other as we all have different spending habits and life styles, and our financial position and income level is also different. How then to choose the best credit card? Let us discuss some of the important points for choosing a good credit card.
 Think and assess carefully why you need the credit card? how are you going to use it. For small purchases or big ones. Is your salary due only on the 15th of next month? then the credit card may be handy to pay up for the beginning bills of every month. Is the card going to be an excess as you are managing very well in your salary and monthly incoming money? then having a card will only promote the habit of excess and impulsive buying and spending. If you may have to carry forward the credit bills for next month then it is better to take a credit card that has low interest rate on money after grace period. So one must think carefully about their lifestyle and spending habits and then consider a credit card.
The most important criteria for choosing a credit card is the APR (annual percentage rate). Nobody would like to pay extra money as interest and the less interest the better on the money used. The credit card user always looks for offers on cards that have low or negligible interest rate. Also consider before hand the grace period for payments after the due date. The credit card company sends  bills with an amount to be paid by the due billing date and after this date there will be interest charged on the money used. How long is this period will also affect our choice of the credit card. Usually the company requires processing and administrative works at the end on the month and all the calculations done, the bill comes say by 15th of the next month. Mostly the grace period falls between of  20 to 28 days but this may differ from card to card and financial credit issuer company to company.
The most attractive are the rewards that come with the credit use of this magic card. Many companies offer free dinners for family. Some also have concessions on flight tickets within a certain period. Think about how many times your family has dinners out, or you take airline trips and then consider going in for this type of credit card with such offers. If you are not a regular eater out and also do not take many flights except for vacations then these rewards will go waste. Also many times you do not get any financial rebates if you do not use these rewards. Some also give concessions on petrol, which can be used if you use your car frequently or daily. But these rewards must not be the only criteria for selecting a credit card as the company may change the rules anytime and the offers may also change.
Considering all these aspects one can choose among the options available in the market. Many advertisements can be seen on TV and internet from various credit issuer companies and one can choose accordingly. It is possible to get more than one card and separate cards can be kept for separate purchases.

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