We all get those credit card offers in the mail. You know the ones I mean. Zero percent for six months on this guaranteed credit line! Somehow you always get the feeling that there’s a catch. But how do you know what the catch is? You have to know how to compare credit cards to find out which may be ripping you off.
One of the first things that people are concerned with on a credit card is the interest rate. When you compare credit cards there are two interest rates you need to be concerned with. There is the introductory APR and the permanent APR. Basically this indicates the percentage of the balance that you’ll be paying back in interest over the course of a year. Most cards offer an introductory rate and this will vary greatly by offer. You could get two offers from the same company and have different introductory rates, this is something you should looks at when you compare credit cards.
The regular rate is something that a lot of bad offers will try and hide, so compare credit cards very carefully on this issue. There will be a section of the offer you get that details all fees and rates associated with the card. It is required by law that this is presented so when you compare credit cards be sure to find it. An average APR for a credit is around 15-17%. Anything more than that and you should probably move on and compare credit cards in other companies.
The next important area to compare credit cards in is the fees associated with it. There may or may not be a variety of fees on the card, you should know what they are. Some cards will have an annual fee, this isn’t unusual but as you compare credit cards you’ll find that it’s not universal. There may also be a one-time setup fee or a monthly service fee. Some cards will have all of these fees; others will have none it really depends on the card. While you compare credit cards you’ll notice that all cards have late payment or over the limit fees, all you need to know is how much those will be.
Finally you should look at rewards when you compare credit cards. Not all cards offer them but a lot do. If you compare credit cards and find a lot that have rewards, weigh these options against each other. You will compare credit cards that have airline miles options, straight cash options, even some that give rebates on specific websites.
Ideally you want to compare credit cards and find one that has a lower interest rate, no fees and gives you something back for using it. Depending on your credit this may or may not be possible. But by taking the time to compare credit cards, you’re sure to find the best offer available to you.
