Credit cards provide so much convenience—only if they are used properly. Choosing the wrong credit card can also lead to major financial disasters. The following are several pointers to keep in mind when choosing a credit card:
1. Figure out your financial needs.
List down all your goals in using a credit card. In doing so, you will remain focused on your real purpose for owning a credit card rather than being tempted by attractive features and deals that you do not need.
2. Avoid choosing a credit card randomly.
No two credit cards are alike—one of them may be better than the other. Do not settle for a credit card offered by the first company that approaches you. It is rather unwise to apply for a credit card without doing any research on it. Look for information online, read customer reviews, and ask for recommendations.
3. Determine the interest rate.
Make sure that your card does not charge a very high interest rate. Paying high interests every month is nothing but a burden to a credit card owner.
4. Choose a credit card with a low APR (annual percentage rate).
The APR is the interest accumulated every year for purchases charged to your credit card. If you intend to use your credit card for expensive items and pay them off in an extended period, then it is wise to choose a card that offers low APR.
5. Choose a credit card with a low annual fee.
Low annual fees are ideal if you plan to use your card only for emergencies and pay the full balance every month. Some credit cards even waive the annual fee in the first year.
6. Read the terms and conditions.
Look for any hidden charge or extra fee for penalties. You may end up paying more than you should if you are not aware of the conditions set by the credit card provider.
The last thing you need is a credit card that charges an amount that’s higher than you can afford. This makes choosing a credit card a must for everyone.