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3 Things You Should Know Before Choosing a Credit Card

No single credit card is better than all others in all categories — or for all people. But by understanding your options and asking the right questions, you can find the card that’s the best fit for your spending habits and credit situation.

So, when you choose a credit card, here are three things to consider:

Understand all the fees involved

  1. Annual Fee: The amount charged to you for using the card each year.
  2. Cash Advance Fee: You might be charged for taking a cash advance.
  3. Balance-Transfer Fee: The fee that is charged if you are transferring a balance from one card to another.
  4. Late Payment Fee: You’ll be penalized for paying your balance after the invoice due date.
  5. Over the Credit Fee: You might also be punished for making a purchase that goes above your current credit limit.

Interest rate will be determined after you apply for the credit card

Interest rates can be expected to change based on the dynamic shifts of the economy. After being approved for a credit card, the interest rate will be determined based on your credit history. As expected, the better your credit score is, you can expect a lower interest rate.

Don’t pick a credit card just because it offers great rewards

Rewards are awesome. For some credit cards, you can expect cash back bonuses or points accrued based on purchased made. These points can go toward nice gifts such as discounted hotel booking, concert tickets, and luxury goods. However, don’t let the promise of rewards distract you. A high APR may cost you more money than you save with the rewards.

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