Choosing a credit card

Choosing a credit card has become much easier over the last few years. Credit card issuers are now displaying their best product features such as fees and interest aswell as other information so to make it easier for consumers to understand.

It is critical that you choose a credit card that works best for you because if you choose wrongly; debt will certainly be on the cards.

When choosing a credit card you need to look at your spending habits and these differ from person to person as the perfect credit card for you can be the absolute opposite for someone else. For example, do you pay off the balance every month or do you pay just the minimum payment.

If you decide to pay just the minimum payment then a low interest credit card would be right for you.  You will be paying an interest on the balance remaining at the end of the month so therefore a low fixed rate credit card would be ideal.

Credit card issuers offer introductory rates which are low initially and this entices people to sign up and then interest rates are raised over the next 6 to 9 months. To overcome this, credit card issuers offers a low rate which is guaranteed but with an annual fee.

If you are paying off the balance at the end of each month then you do not really need to be concerned about low APR as you will not have a balance for interest to be paid on.  Also without having a guaranteed low rate, you can avoid the yearly fees.

Grace period

When applying for a credit card make sure before hand that the card issuer allows you to pay off your balance at the end of the month without charging you. Usually, card issuers that do not allow you a grace period start charging interest as soon as you begin to make a purchase.

Cash advance fees

Most card issuers charge an interest for withdrawing money from ATM machines and usually at a higher rate. Be careful about cash advances as they have no grace period even you have one with your purchases.

Late payment fees

Make sure you decide on how consistent you are when paying the credit card on time and also keeping within your credit limit. If you are late in paying your credit card statement or go over your credit limit then beware of the late payment fees and similar charges.

The above mentioned late payment fees can be considerable so do make sure payment is always made on time and without going over your credit limit.