When you are looking for a new card, you have many decisions to make, related to
everything from the lender you use to the deal you get. Because of this, finding
your best offers can be a little tricky if you don't know exactly how to go about
There is no one best credit card for every person.
Because each borrower is in a unique financial situation and has their own credit
score and account management habits, there is a wide range of credit card offers
available to them that will benefit them in one way or another. The trick is determining
exactly which type of account will be best for you, based on the accounts available.
And that will take a little bit of understanding of how each of these accounts works.
Types of accounts
This type of account is a very good one if you're already carrying a balance on another
card - and sometimes more than one - and want to get it reduced quickly and easily.
The benefit they provide is that they come with a low introductory rate - usually
0 percent - for a number of months after the account is open. This teaser period
can last for as little as three months and, in some cases, as long as 24, though
usually the period is between six and 18 months.
During this time, you will be able to pay down a significant portion of your balance
without incurring one cent's worth of interest charges, meaning that everything
you pay is being applied directly to the principal.
However, there are some things to look out for. First, you will need to be careful
of how you use this card during those first few months; sometimes they will apply
the 0 percent interest rate to purchases as well as balance transfers, but more
often they will not.
Consequently, if you buy anything with this card, you will likely face a standard
interest rate for doing so. Furthermore, if you are unsuccessful in paying off your
balance in full by the end of the introductory period, you will likely have to pay
retroactive interest on the remaining total, which can be expensive.
Finally, you will almost certainly have to pay a balance transfer fee - usually
about 3 percent of the total being moved to the new account - to get started with
your new card. However, that will likely be a small amount compared with what you
would pay in interest on a normal card. Fortunately, the best cards for balance transfer
will provide a significant benefit to you in the end, so the time and effort spent
doing research before you apply for a card is well worth the time and effort.
This is an extremely popular type of credit card offer for many consumers because
they see the benefits they earn from them as "free money." However, this is not
Rewards accounts - whether they grant consumers cashback, points, or airline miles
- can be a great way to defray the costs you face for using a card to finance purchases,
but if you want to maximize the benefits, you have to be smart about them.
These cards typically come with far higher interest rates than traditional accounts,
and many have annual fees. For this reason, you will need to do a bit of research
into your own habits to find the best rewards card for your finances and lifestyle.
For instance, you should look at how much you spend on your charge cards now, and
how much you might expect to spend based on the amount you usually carry over from
one month to the next. By doing so, you can calculate how much you would earn in
rewards and the amount you would also end up paying. If the former exceeds
the latter, that rewards card might be worth it for you.
Of course, you should also consider the type of rewards you want to earn. For instance,
if you don't travel often, airline miles probably don't make much sense, and it
might be a better idea to settle on cashback cards or those that give you points
you can redeem for everyday items.
Cashback cards are a specific type of rewards account that may be the best option
for some people. Since rewards are paid in cash, you won't run into a situation where
you can't find a reward for your points or miles. You may even be able to
use the rewards as a statement credit and reduce your debt.
Different cashback cards also offer additional savings in particular spending categories
on a rotating basis or have other extra benefits. These may vary based on your own
personal credit history or any annual fees that the card may come with.
Also check for a cap on cash back that can be earned. This is often expressed “x
percent of purchases, up to a limit of y dollars.” In practice this may mean that
there is a maximum cashback you can earn. Many cashback offers also require you
to exceed a monthly minimum spending level before you start to accumulate cashback
These programs are a great idea for consumers who tend to carry a balance from one
month to the next because the cards apply relatively low interest rates to an account
when this happens.
The value of this type of card is easy to see: If you are paying a lot in interest
charges, you can reduce that amount with a low APR offer. However, you will
have to consider what interest rate you qualify for. That's because not every card
offer is created equal.
For this reason, you will need to consider a number of credit card apps, and inspect
them to make sure there are no other costs associated with them, such as annual
fees. These might eat into the savings you expected to enjoy from your new
card and make them less beneficial than your current account.
You might also want to consider comparing the various online credit card applications
for these accounts with what you are paying for carrying over your current balance.
The difference might not be as stark as you think.
These cards are idea for those who do not tend to use their credit card very often,
or want an account they can put away for a rainy day.
These are ideal because they do not charge an annual fee, as the name implies, and
can therefore be relied on only in an emergency or when a big purchase has to be
made, without worrying about incurring costs for simply letting it sit in
your wallet or desk drawer.
Of course, lenders usually make sure they generate some amount of revenue from these
cards by increasing the ongoing APR, so it is important to make sure you pay down
your balance in full at the end of every month to avoid higher interest charges.
Furthermore, you should also know lenders might cancel such a card if it goes too
long without being used, so making even a small purchase on it every few months
will ensure it stays open.
These cards are generally intended for people who do not have a credit history -
usually young people, hence the name - and therefore the cards can come with terms
that may not be overtly beneficial. That's because the lender usually cannot accurately
judge the recipient’s credit risk.
If you are looking at student card offers, you can expect to pay fees and higher
interest rates, but they will grant you the ability to borrow money and establish
a responsible, strong credit history, at which point you can upgrade to
a more beneficial account.
This kind of card is a good idea if you own a small business because studies have
shown that private companies that have access to credit are in a better position
to succeed financially. However, there are some things you will need to
be careful of when dealing with these accounts.
For one thing, the credit limits on these accounts are likely much higher than
you're used to dealing with, and for this reason it can be easy to run up a sizable
debt in a small period. Furthermore, these cards do not come with the same protections
that are standard with those for consumers.
Because of this, ensuring you have selected the best card for your business will
be a function of the card you have chosen and how you use it once you have it.
Can you generally improve the quality of credit card offers you receive?
If you're trying to find the most beneficial credit card deals available, one wise
strategy is to take steps to improve your credit score before you apply.
Generally, your credit standing will affect the kinds of programs you have available
to you; if you have bad credit, you might not even get the chance to apply for more
beneficial cards, and normally, the top credit cards are available only to people
who have top-notch credit scores.
For this reason, working to improve your score - by making all payments on time and
in full, and by working hard to reduce your various outstanding balances - is usually
a good method for getting the best available credit card offers.
Any time you're in the market for a new bank card, you should always make sure the
offer that catches your eye would work for you and your unique personal financial
Consider checking these resources before you apply:
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Final thoughts on getting your Best Deal on a Credit Card:
- Do your research before you apply for any card.
- Compare a reasonable number of relevant deals.
- Estimate your usage patterns and the benefits you might use/accrue versus the cost
of that card.
- Carefully fill out an application for your top credit card choice and wait for the
results. Online applications are turned around quickly, so if for some reason you
are not approved for your first choice, you can always apply for another later.
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