When it comes to finding a new credit card, you might not have as many choices as people who curently have good credit. Nevertheless, you should still do some comparison shopping to be sure you are getting the very best deal available to you. Charge card terms and interest levels vary – and some of those variations can make an enormous difference to your wallet. Always shop for the card with the very best interest rate and terms.
Here’s what you should search for in a credit card:
1. Avoid high interest rates. Credit card companies disclose the interest rate in several ways, but you desire to look at the Annual Percentage Rate (APR). fe-shop This is the level of interest, transaction fees, along with other charges that you’ll pay each year, expressed as a percentage. It’s the best indicator of the specific interest you will pay.
2. Avoid low introductory rates. Some cards have a low “introductory rate” (also known as a “teaser rate”). After a few months, the interest rate will skyrocket. Also, sometimes the advertised rate only applies to certain people, such as those earning a higher income. The card company charges a higher rate to those that don’t qualify – that could mean an unpleasant surprise whenever your first bill arrives.
3. Understand interest calculations. Many banks today charge interest using the average daily balance. This is one way it works: Say you charge $1,500 on your own credit card and pay $1,200 on the deadline. Whenever your next bill arrives, a bank using the average daily balance will charge interest on the $1,500 average daily balance from the previous month, not on the $300 you still owe.
4. Review the grace period. Here is the interest-free period of time between your purchase date and the bill deadline. It is usually available only to those who do not carry a balance. If you pay your bill in full each month, be sure to have a grace period. Otherwise, you’ll pay interest from the date of your purchase. In the event that you carry a balance, a grace period is not important.
5. Avoid high annual fees. Some credit card companies charge you a flat fee (along with interest along with other charges) for utilizing their card. Some do not. If you pay off your balance every month, you want a card without an annual fee. If you carry a balance, a card having an annual fee but a low interest rate may be better than a card without annual fee but a higher interest rate.