by : Jack Chevalier



One of the primary decisions to make during credit-card selection process is to decide which plan to choose. The costs and terms of your credit card plan can make a huge difference in how much you pay for the privilege of borrowing.

In the disclosure form from the credit-card issuer make sure you look closely at the credit terms and read all fine print. Don't forget about specific charges like late charges and over-the-limit fees. Along with these also think about how you pay your bills each month.

For instance, if you always prompt in paying your monthly bill in full, the best type of card for you is one that has no annual fee and offers a grace period for paying your bill before finance charges kick in. If you are not regular in paying off your balance each month, be sure to look at the periodic rate that will be used to calculate the finance charge.

One of the major factors to consider while choosing a credit-card plan is whether it has a variable or fixed interest rate. A variable or fixed rate in charging interest as it can have a huge effect on what you pay to use your card.

As soon as the interest rate related to the index is identified, the credit-card issuer will add a number of percentage points known as margin to this index rate to come up with the rate which will be charged to consumer. In few cases, the issuer might opt to use another method to determine the rate to be charged.

Study the fixed-rate plans properly. Sometimes, there may be few percentage points higher than a variable rate, but it is good to know what your interest rate will be. One difference about variable rates is that they are not fixed and can increase or decrease your finance charges.

So be careful while choosing a plan for your credit card as there is a high chance that you may end up with a card that does not suit you.