With so many bank, store brand, and other credit cards on the market, it can be hard to pick the right one. Here are some tips for making the best decision for you and your family.
Compare the APRs of at least 3 credit card companies. An APR is the annual percentage rate. This is the interest you’ll pay over the course of a year if you carry a balance. So, a daily interest rate is just the APR/365. Be sure you are comfortable with this. It’s worth shopping around to find the best one since there is a wide range of APRs out there.
Check if the credit card company can change the terms of the credit agreement without your permission. The fine print of your agreement with the credit card company will show whether or not the credit card company can change the terms of the credit agreement without your consent. Usually, they must notify you at least 15-30 days in advance of any change taking effect, but often you won’t notice these changes because they’ll come as a stuffer in the envelope with your bill or statement. The worst part is that continuing to use the card is most often considered to be a tacit acceptance of any new terms and conditions! Be sure to obtain your credit card from a reputable credit card company.
Check if your bank or credit card company charges trailing interest, charges over limit fees or does double cycle billing. Trailing interest is interest that accrues from the time your statement period ends to the time your payment is actually received and processed by the bank or credit card company. You need to clear your balance within the standard grace period of the charges being posted in order to avoid having to pay trailing interest. Over limit fees are charged when you’ve gone over your double cycle billing and are a slightly different way for credit card companies and banks to make more money. When they do double cycle billing it means they are accruing interest over two cycles. Even if you pay off most of the bill, interest will be calculated on the original amount for a longer period of time.
Consider whether you’ll actually use those points. A lot of credit cards come with airline or other types of points. These “rewards cards” are not always a great deal – some come with fees and higher interest rates, and some of the points you earn expire. It’s a good idea to do the math – figure out if you will actually earn a reward and use the reward in time. If not, it may be worth considering a cash-back card. These can provide up to 1% of all your purchases in cash back at the end of the year. If you can’t find a rewards card that make sense for your situation, then stick to a standard card and save your money.
