Comparing Credit Cards
Comparing credit card offers may sound difficult with so many competing cards on the market but the internet can make your life easier. How to get started?
It will help a lot if you first figure out the reason for obtaining a card before you start to compare credit cards. You must be honest with yourself about this, because the best credit card for you is the card that matches your needs. You can now use these to check how well each card meets your needs.
In looking for the best credit card deals, these things should be considered:
Interest rate. Look particularly for the rate that will be used to calculate the finance charges every billing cycle. Pay close attention to the default interest rate — the rate imposed when payments are late and credit limits are exceeded. This rate is above the standard purchase APR or interest rate.
The Balance calculation method. If you intend to carry a balance, make sure you understand the card issuer’s manner of computing the balances on which interest will be charged. The methods that produce the lowest interest are the adjusted balance and average daily balance excluding new purchases.
Balance transfer opportunities. Offers of very low introductory rate for a specified period are intended to entice you to transfer balances from a competing credit card. Once the offer period ends the interest rate normally reverts to a much higher rate so check this. Using a credit card comparison website allows you to sort cards by interest rates.
Annual fee. Depending on the features or prestige of a card the annual fee can really vary. Be zealous in your credit card comparison to look for the least fee. To be competitive, there are many cards that do not charge any annual fee but the trade-off might be in higher interest rate, so check carefully.
Cashback. Some cards offer cashbacks, varying from 1% to 3%, on your purchases. This does give you a welcome discount but if your plan is to carry a balance, the 1% discount will mean nothing compared to the 14% interest on your outstanding balance.
Late payments and other fees. If you don’t have the minimum due amount paid in time you will be hit with high late payment fees. If you break a card rule then their are often other fees imposed. Credit card comparison is very important to look for the cards with the lowest penalty rates, over-limit fees, and other fees.
Rewards. The best credit card rewards programs require the least number of points to redeem the item you want. Look at the participating establishments where you can earn rewards points with the card, and make sure the places where you shop are included.
Credit Limits. Check how much credit will be allotted to you. Credit card comparison is needed against the amount of purchases you expect to charge to the card on a regular basis. You don’t want to be exceeding the credit limit. To allow for a buffer and the fact that you have some time to pay your credit card bills you should aim for a credit limit at least twice your avaerage monthly usage.
Foreign transaction charges. If you travel a lot and expect to use the card a lot overseas, check out and compare the applicable fees for foreign transactions and foreign exchange differentials.
Cash advance charges. Interest rates and transaction fees for cash advances are usually much higher than normal purchase transactions. Making cash advances should be avoided but it’s worth checking the fees in case you ever have to use it.
This article by Richard from compareyourbank.com.au who compare products including St.George credit cards.
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