Choosing the Best Credit Card Offer

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Invest Media – According to a recent research from the U.S. Census Bureau, more than 181 million Americans are credit cardholders. Seventy eight percent of consumers own a credit card, and the average credit card owner has 3.5 credit cards.  This means, that nearly everybody ought to make its own decision on choosing the best credit card offer.

Just browse online or through the daily newspaper, and you will be flooded by the number of credit card offers available. Move around the town and you will see credit card offers everywhere. In this situation, what are the most important factors to consider while deciding?

Practically, there is not anything like a best credit card offer. The superior question needs to be “Which credit card offer is more suitable for me?” The expenditure habits of one consumer differ from that of another person. Their living styles vary and consequently their needs vary too. So, in order to decide which credit card offer is best, you must evaluate your needs, income, lifestyle and expenditure habits.

Credit card rates

According to cardholders, credit card rates and annual fees are among the most crucial factors in the choice of a credit card but not the only one. Consequently, a proper understanding of Credit card rates is even more compulsory. Credit card rate is the interest rate, which the credit card suppliers charge on the due amount. The credit card company charges you such an interest only if you do not repay fully your credit card debt in time. When you receive your credit card invoice, it clarifies the full amount you owe the credit card supplier; it specifies the minimum payment that you must make (by a particular date), in order to avoid incurring additional fees. You have the choice of making either a full payment or just the minimum payment. If you decide to make a full payment by the due date, you are not charged any interest. Nevertheless, if you decide to make a partial payment, the credit card supplier will calculate due interest based on the credit card rate on the balance amount. This credit card rate is the annual interest rate negotiated at the time of applying for the credit card.

The credit card suppliers utilize this annual credit card rate to calculate the monthly interest rate on the balance amount that you owe them. The balance amount constitutes the full amount minus all payments made by you. This way, the interest is added to your balance for the following month (next billing cycle). If you make a partial payment once more, a new balance is re-calculated again and a new monthly interest rates is applied; it keeps going on and on until you fully repay your credit card obligation. According to recent data from Federal Reserve’s G.19 report on consumer credit, the average APR on credit card with a balance in 2011 was 12.78 percent. That is how credit card rate acts in this vicious circle. Here is the cause why credit card rate is noted as one of the most key variables in choosing a credit card.

The reward points

According to research from Federal Reserve Bank of Boston, more than 60 percent of consumers own a rewards credit card. Visa claims rewards cards now make up more than half of all credit cards issued and about eighty percent of credit card expenditures. Credit cardholders state rewards are the second-most important reason for deciding to apply for a specific card, behind no annual fees and ahead of low interest rates. (Source: Aite Group survey, January 2008)

If you frequently fly by air, one co-branded airline credit card may be more convenient for you than the general purpose one. These cards offer rebates, discounts, and other kind of rewards when the credit cardholder makes payments (the rewards are even higher when these credit cards are utilized for paying for the airline tickets or other airline services). Similarly, if you have a preferred retail store where you often shop, it would be useful to be aware if the particular retailer is a credit card supplier and if there are any credit card offers. Most of the big retail chains provide co-branded credit cards to the consumers; these cards offer rebates and discounts when used for making payments at their chain.

In the same manner we may also have credit cards for gas stations and grocery stores where you often make purchases. If you do not have any specific needs, you can use a general purpose credit card, which accumulates reward points on every purchase. These points can later be redeemed for cash, rebates, or rewards. By so doing, such card could become a good credit card deal for you.

 Credit card fees

In addition, many credit cards are associated with additional fees. You must read your credit card agreement carefully just to make sure you understand all the fees you agree to pay. The most common fees to look for are: an application fee (charged when you apply for a credit card), an annual fee, membership fee, or participation fee (a charge for having the card), a set-up fee (charged when you when you open a new credit card account), a cash advance fee (charged when you use your credit card to get cash), a late-payment fee (charged if your payment is received after the due date), an over-the-limit fee (charged when you make a purchase that takes your balance over your credit limit), a credit-limit-increase fee(charged when you ask for an increase in your credit limit). Your credit card can offer in addition to the above stated fees insurance or debt coverage fees. You should read your agreement carefully to make sure you understand the services offered and the fees.

To summarize: if you make a thorough research, you will find lots of lucrative credit card proposals. However, this does not mean that all of them are suitable for you. In order to take a reasonable decision, you need to evaluate your needs and rank them precisely. Further, you can make your choice and apply for a credit card, which covers most of your requirements and provides maximum benefits.

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