Credit cards are just like any other tool; they can be used for good things or they can be used for bad purposes. Its like a car; you can use your car to mow down people on the sidewalk, or you can use your car to drive people to the hospital. It’s your choice.
At the end of the day, a credit card is just a tool. You’re the person thats going to be using it so your choices determine whether you look at a credit card as a blessing or a curse. Unfortunately, many people think that just because credit cards exist and they can get into debt using credit cards that by logical extension, credit cards are necessarily evil. This is not true.
Credit cards are neutral. They dont hold a gun to your head and force you to whip them out and spend and buy stuff you dont need. Credit card companies dont get you addicted to credit cards. It’s really all your choice.
So it is really important that when you look for a credit card that you keep these top five details in mind. They can spell all the difference in the world when it comes to good credit cards and bad credit cards. Bad credit cards can still do a lot of good. Again, it all depends on how you use it. However, if you want to be a responsible consumer, keep these five details in mind when selecting a credit card.
1. Interest rate
This is a no-brainer. A cards interest rate is how much that card will cost you when you use that card to buy stuff. This is the cost of the credit card. Obviously, the lower the interest rate, the better. There are certain credit cards that fix their interest rate for extended periods of time. If you can get such a credit card that would fix your interest rate to a very low rate for an extended period of time, youre in luck.
Many people are at the mercy of the credit card company because the interest rate goes up and down periodically. This can be a rude surprise if you buy a lot of staff with your credit card, and you happen to buy a lot of items when the credit card interest rate peaked. So look for fixed interest rates, and look for low interest rates.
2. Annual fees
Some credit cards charge an annual fee. I know its hard to believe but some credit cards really think that they’re doing you the favor by giving you the credit card, so they’re actually charging you money to use your credit card. Thankfully, due to market competition, many credit cards don’t charge an annual fee. With that said, be careful.
Look at your statement and see if there are other fees that take the place of annual fees. Many credit card companies are very clever; they disguise annual fees in terms of other costs and charges. Don’t fall for that trick. Make sure that if you are applying for a credit card that you look at the terms and conditions to make sure that there are no other fees except the interest rate that you will be paying.
3. Transaction fees
As mentioned above, there are certain hidden costs that shady credit card companies try to pull on their unsuspecting consumers. Its very important that when you are signing up for a credit that you take a look at the terms and conditions, and look at all the fees that are involved. Make sure you understand all the fees. The best credit card doesn’t charge you any fees except for the interest rate.
4. Rewards programs
There are some cards that pay you points; like airline points, or shopping spree points, or discount points. These all fall under the umbrella of rewards programs. In other words, the more you use the credit card, the more rewards that you get.
Keep in mind that not all rewards programs are the same. Some rewards programs are limited; meaning, you can only use them for certain things and under certain circumstances. The best rewards programs are like cash. You can use it anywhere at any time. Look for those. As much as possible, look for rewards programs with no limitations.
5. Usage limitations
There are certain credit cards that you can only use them at certain stores, or you can only use them in certain circumstances. This may be good if you are looking for a certain amount of limitation so you are more disciplined in using your card. However, since most people look at their credit cards as an emergency source of cash if they find themselves in a bind, this might not be a good idea.
Usage limitations might limit the use of the card to such an extent that essentially, for all practical purposes, becomes useless to you. So be very careful of any usage limitations.