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How To Choose A Credit Card
Choosing the right credit card can be an important step to building good credit. When you choose the right credit card with Gettingacreditcard.com, there are several things to think about, such as APRs, finance charges and fees, bonuses, and credit limits. If you understand the features of a credit card and what you are looking for in a card, choosing the right credit card won’t be difficult.
APRs
The APR of a credit card is the Annual Percentage Rate. This is a percentage that a credit card user will pay if the user carries over a balance, uses a cash advance, or transfers a balance from another credit card. This rate can change depending on the conditions of the credit card, which include:
- Different rates on use of the card, such as one rate for purchases, another for cash advances, and another for balance transfers.
- The amount of the remaining balance can effect the APR in rates called tiered rates. There is a certain APR until you hit another tier, then it may go up or down.
- The APR may also go up if you are late on making payments, depending on the card.
- Some cards have an introductory APR, which is a rate that goes up after a certain amount of time.
- Other cards have a delayed APR, which doesn’t go into effect immediately.
Obviously, choosing the lowest APR is in your best interest if you do not intend on paying off the balance at the end of every month. But you should also keep the finance charges and fees in mind as well when choosing the right credit card.
Finance Charges and Fees
Finance charges and fees are the amount a person is charged for using a credit card. When you are choosing a credit card, you should consider what types of finance charges and fees the credit card company is offering. These fees can include:
- A minimum charge just for having the card.
- How much an overage charge is.
- Separate fees for cash advances, balance transfers, and late payments.
- Extra fees which can include return-item fees, credit-limit-increase fees, and over-the-limit fees.
Bonuses
Of course, the bonuses offered by a credit card are not the only reason to choose which credit card is right for you. Yet, if there are two cards in question, the bonuses a card offers, such as frequent flyer miles or cash rebates, might be the deciding factor in which card you choose.
Credit Limits
The credit limit of a card is an important factor when choosing a credit card. Of course, choosing a high credit limit could lead to trouble, primarily in the form of over-spending. As a general rule of thumb, you should never have a credit card limit over 20% of your gross income. And really, no one should have a limit over $10,000. But of course, a credit card with a very small limit isn’t worth the amount of interest and fees that you will pay to use it. The best advice is to find something in the middle, so that you can be secure in having the credit you need, while not having too much to pay back.
As long as you make your payments on time and have a fixed interest rate, you can always choose the right credit card for your needs, as long as you understand the features.
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