Like any merchandise, you need to compare credit cards too
before you actually decide on which one to go for. The selection
of a credit card should not be based just on what is good, since
there is nothing like a good credit card. Neither should it be
based on the recommendations from a friend. The credit card that
fulfils your needs is the one which is good for you. Something
which fulfils someone else's need would not necessarily be good
for you since everyone has their own needs. Moreover, do not get
bowled over by all the offers being run by a particular credit
card. A lot of them are just selling tactics and might not meet
your requirements (and you can't keep changing credit cards each
fortnight).
So the first step is to evaluate why you need a credit card.
List down all your requirements and classify them as primary,
secondary and tertiary needs. Next, search for the credit cards
that fulfill most of your primary needs. Compile this
information in the form of a list or a document. Now check these
credit cards for what secondary needs they fulfill additionally.
By this time you should have short-listed 2-3 of credit cards
(or maybe just one). Finally use your tertiary requirements to
solve the tie-breaker.
The following are the things that you should consider when
comparing credit cards:
1. The APR: There is a short term as well as a long term APR.
Short term APR is a marketing and sales tactic and is used to
lure new customers into signing-up for the credit card. This APR
is offered for a short term just after you sign-up for a credit
card. So you should really be looking at the long term APR.
2. Additional benefits: These could be in terms of discounts at
a particular store where you shop a lot or discounted car
rentals or air fares etc. Again, based on your requirements
these may or may not be of your interest
3. Annual fees: Of course, this is your outgo on credit card
services and whether you use your credit card once in a year or
1000 times, you will always have to pay this fee. So it is a
very important factor indeed.
4. Credit limit: For heavy spenders, this is a very important
feature. Again, check your requirements before basing your
selection on this feature.
5. Rewards program: Some credit cards offer very attractive
rewards program. These are the points you earn for spending on
your credit card. Once you have enough points you can barter
them for goods or service and even frequent flyer miles.
6. Interest free period: If you are going to overspend on your
credit card, the interest free period might be of particular
interest to you.
7. Cash withdrawal fee/charges: These are the charges you pay
when you withdraw cash on your credit card. So if you intend to
use such a service, this will be of interest to you. 8. Forex
conversion rate/fees: For people traveling overseas a lot,
foreign currency conversion rates will make a lot of sense. Some
companies don't charge a fee but have ridiculous conversion
rates which compensates for the fee.
There could be a lot of different offers and you might be
enticed to go for them. However, the key is not to get lured by
such offers and to stick to your requirements when making a
selection.
About the author:
Rudy Hadisentosa: CCN.com is a free online
credit cards review
and application website. We offer credit cards selection from
visa,master cards, discover, american express and many others.
We have quite some categories and hundreds of credit cards
selection to fit your need.
Apply for a credit card at CCN.com.
