Personal Finance Advice

There is a lot more to choosing a credit card than finding the lowest interest rate.  Although it’s great to have a credit card with an impressively low interest rate, there are other things you should take into consideration before signing on the dotted line.

Fees.  Some credit card companies offer attractive interest rates but then turn right around and tack a wide variety of costly fees on to the account.  A really low interest rate becomes a lot less attractive when you’re also paying annual fees, cash advance fees, and other fees that are ridiculously high. 

Terms and conditions.  How long does the low interest rate last? Sometimes the low interest rate is a teaser rate, meaning it expires after a preset amount of time and you’re left with a higher interest rate than you expected.  You should also pay attention to how long the grace period is from when you make a purchase to when interest is charged. 

Rewards programs.  If you use your credit card frequently you might want to find a credit card that offers rewards because this will allow you to earn points toward travel, merchandise, cash back, or some other reward.  Reward cards sometimes come with a higher interest rate, but if the rewards program is phenomenal then it may be worth it.

Available credit.  Make sure that the credit card you’re applying for will offer you the kind of available credit you need.  If you just need an emergency card then you don’t need a huge available balance, but if you’re trying to do a balance transfer from a higher interest card then you’ll need to make sure that you can get the available credit you need.

Acceptance.  Not all credit cards are created equal.  There are some stores that won’t accept certain credit cards, so don’t apply for a card that you won’t be able to use at the places you frequent.  For example, both American Express and Discover cardholders may occasionally run into situations where they can’t use their cards, although this is happening less and less and these cards become accepted more by merchants.

Don’t choose a card just because it has a cute picture on it or because an organization you’re affiliated with endorses the card.  Always read the terms and conditions before applying so you can be sure that you’re getting the best credit card available to you.