Credit cards have become necessity in our life. When you decide to apply for a credit card, you see a lot of offers which tempt you with great reward programs and low and 0% introductory rates. What card to choose? I will help you to understand the basics of credit card deals and what main terms and conditions shall be taken into consideration. Interest rates. Many credit card issuers entice their customers with low introductory rates. Don't confuse the introductory APR with the regular APR - the first one is usually lower and lasts up to 1 year. When the introductory period finishes and the regular APR appears, it might continue to go up. That's why you need to find out whether the APR after the introductory period is going to be fixed or variable.
If you don't pay your credit bills on time, you can be switched to a default APR. Some companies offer to return to the regular APR if you make at least the minimum payment on time for 12 consecutive billing periods.
Annual fees. These charges can vary from $20 for an ordinary Visa or MasterCard up to $100 for a gold card. As the credit card business has become more competitive, the companies have to lower the annual fees to attract new customers. Some credit card companies don't charge any annual fee at all.
Other fees and charges. You can be charged a cash advance fee, a fee for paying late, and a fee for exceeding your credit limit. If you want to transfer your balance, there can be a balance transfer fee. Needless to say, the fewer fees - the better.
Grace period. If you pay your balance in full every month, it will be very convenient if you credit card has a large grace period. Look for the credit cards that have a grace period of 25-30 days from the due date before the interest is charged. If you pay the debt in full before the grace period finishes, you get, in fact, a free loan.
In addition, grace periods can differ according to the type of purchases. For example, making purchases on your credit card may have a long grace period up to 1 month. However, cash withdrawals from your credit card may have no grace period at all - and the interest is charged from the date when you obtained the cash.
Reward programs. Nowadays most credit cards feature various reward programs. Some ones offer to accumulate points that can be redeemed to various goods and gift cards, others feature cash back rewards. Look for the programs that suit your personal spending pattern and needs - if you afraid to fly, it's no use to choose a frequent flyer card that offers free flights.
Be attentive - sometimes it's more profitable to get a credit card with lower percentage rates and not a good reward program than to accumulate points and pay a high APR.
If you find an ideal credit card offer for you, find out what credit score it requires. The better you history the more attractive credit card offers you can get.
