Master Your Card » Credit Cards

How to use your credit cards effectively: 6 tips

Emmie — Sun, 06 May 2012 00:14:20 +0000

It goes without saying that credit cards are useful for monetary transactions in this cashless society. Credit cards meet the needs of different people in different ways. It is thus important to choose the right card and use it effectively so as not to fall into a debt trap.

Below are some tips to help you use your card to your maximum advantage.

1. Interest free period

A card that offers interest free charges for longer, or one that has lower interest on purchases will suit a consumer who needs extra time in paying for his or her purchases every month. If you know that you can’t pay your balance on time, look for a card that offers a longer interest free duration. Some banks offer no interest for up to 6 months or more, so this may be a good offer to take advantage of as long as you don’t overlook the date the interest rate charges commence.

2. Be aware of annual fees

If you are planning to use your credit card for basic needs such as making rare online transactions and as an emergency backup paying for an annual fee will not be worthwhile. However, if you are a frequent user of the credit card and are after the rewards programs or redeeming your points for purchases, then the annual fee may be worth paying for.

3. Stick to the minimum credit limit

It won’t always be a good idea to increase the credit limit of your card if this is offered by your bank. By sticking to the minimum credit limit, you can be assured of not being lured by the temptation to overspend. Also, trying not to get too close to your credit limit is a good way of restraining yourself from unnecessary spending. Spend within your budget and only spend on what is necessary.

4. Avoid frequent card switching

Some people tend to switch from card to card with the aim of saving money with balance transfer rates. Though this may sound practical, if you fail to pay the required amount on time, or to switch card again before the interest rate goes up, it may end up damaging your credit.

Some banks offer a grace period of 6 months before a balance fee applies. Failing to pay up by the stipulated time will result in having to fork out unnecessary expenses. In addition, credit card companies charge a balance transfer fee so that they make some money from credit card switchers. Alternatively, you can call your bank to ask them to match the offer before switching to another bank that offers credit cards with a lower interest rate.

5. Track your credit card expenses

Keep your receipts in a safe place so you can keep track of your monthly expenses. By doing this, you can check yourself from making an impulsive purchase knowing how much you have already spent in a particular month. A debtor’s worse nightmare is spending beyond his or her budget or maxing out on the credit card, hence escalating his or her debt.

6. Pay in full

Banks require their credit card customers to pay at least the minimum charge each month. Making only the bare minimum payments may cost you more money due to the interest mounting up. It is advisable to use your credit card to pay for items you can afford to pay in full in each to avoid the debt trap.

Credit cards can be an advantage if you can use them effectively. Look at the above tips to ensure that you are getting the most out of your credit card.

Image by Andres Rueda

Using Credit Cards to Pay Insurance Premiums: Pros and Cons

JE Cornett — Sat, 21 Apr 2012 23:30:25 +0000

It makes sense to compare home insurance, car insurance and other essential cover carefully to find a policy that suits your budget. But how do you choose to pay your premiums?

For many of us, our credit cards are such a ubiquitous presence in our wallets that they can be the first form of payment that we reach for, whether we’re paying bills or making routine purchases. If you’re planning to use your credit card to pay your insurance premium, then consider the pros and cons of using credit to make this payment carefully before you turn to the plastic.

Pro: Using a Credit Card to Pay Insurance Premiums is Convenient

Paying bills using a credit card is often much easier than remembering to fill out a cheque for the premium, stick it in an envelope, and get it mailed out in time to post to your account prior to the due date. If your insurance premium is due monthly, then you also save the cost of an envelope and postage each month by paying with a card.

Con: Using a Credit Card to Pay Insurance Premium is Too Convenient

The convenience factor of paying insurance premiums by credit card can work against you. While it may be convenient to pay by credit card, it may be less convenient to remember to pay the charge off before you’re charged interest on the insurance premium payment. In this case, you’ve upped the cost of your insurance premium when you add in the additional interest charges.

Pro: Paying Insurance Premiums By Credit Card May Help You to Avoid Fees

Imagine you’ve been so busy that you’ve let paying your monthly or yearly insurance premium totally slip you’re mind. Now, it’s the morning of the day your insurance premium is due, and there’s simply no time to get the cheque to the insurer.

If your payment is late, you may be assessed a late charge, or your insurance may even be cancelled if you make a habit of missing premium payments. In this case, paying by credit card may make sense. You’ll avoid any fees associated with late premium payments, or the even bigger potential problem of a cancelled policy. Having your insurance policy cancelled due to non-payment of a premium can create credit and insurance headaches that will stay with you long after the payment date has passed.

If you are over 14 days late to make a payment, the insurance company may refuse to pay any claims until your account is paid up to date. If you leave it for 30 days, the insurer may cancel your policy. Your insurance company may sock you with an increased premium in order to reinstate your policy, or may decline to reinstate it at all. As though this were not bad enough, other insurers may be wary of insuring you if you have a prior cancellation for non-payment on your record.

Con: Increasing the Price of Your Insurance By Paying With a Credit Card

If you’re paying your insurance premiums by credit card because you otherwise could not afford the payment, you’re raising your insurance costs exponentially each month that you carry a balance on your credit card instead of paying it off in full. The average credit card interest rate is around 15%; if you charge your insurance premium to a credit card but don’t pay it off before your next credit card statement arrives, then you’re adding 15% to the cost of your insurance each month.

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Are You Ruining Your Credit With Your Credit Card?

JE Cornett — Thu, 15 Mar 2012 21:31:34 +0000

Your credit rating and your credit card are yoked together irreversibly. Use your credit card wisely, and your credit rating may soar. Abuse the privilege of having a credit card, and you may wreck your credit. The problem is, many of us don’t realize we’re using our credit card to destroy our credit until the damage is done. If you’re making any of the following mistakes with your credit card, rethink your actions before it’s too late:

Making Late Payments

When you sign a credit card agreement, it includes a promise to pay your credit card bill on time or face the consequences. The consequences, unfortunately, may be a nose-diving credit rating and all the trouble that comes along with that rock-bottom rating. If you’ve been lax in the past about making your credit card payments on time, now is the time to change that habit. Get your payment in the mail at least a week before it’s due, or pay online or by phone a couple days before the due date. If you have a hard time remembering, set an alarm on your phone or an email reminder.

Making Minimum Payments

Many credit card users assume that because the credit card company sets a minimum payment that paying just this minimum payment is wise. Nothing could be further from the truth. When you make only the minimum payment, you’re barely covering the interest on your debt, allowing the principal to continue to grow and your debt to balloon. Eventually, you hit the debt ceiling, otherwise known as your available credit limit. For more on that, read on:

Using All Available Credit

If your credit card issuer gives you a credit limit of $10,000, that means they want you to charge that much, right? Wrong. Just because a creditor agrees to extend you several thousand dollars in credit in no way means that you should use all that credit. When you do, you appear irresponsible, at least to creditors and to potential lenders, and the result may be a credit rating that sinks.

Aim to charge less than half of your available credit on any given credit card. If you’re to the limit on a card, start applying any extra cash you can find or make to that balance.

Juggling Credit Card Balances

One of the oldest debt repayment tricks in the credit card books is the honeymoon rate juggling act. You know the one — it’s when you open a low or zero-interest credit card with the intention of transferring a high-interest rate balance, then paying that balance down or off. While this can work, it may also backfire, shooting your credit rating down if it does.

If you’re continuously opening new credit card accounts, then neglecting to pay the debt off completely, you’re hurting your credit in two ways: one, by opening new accounts, which doesn’t help your credit rating, and two, by keeping balances that are close to the available credit limit.

You may improve your credit by using a credit card the right way. But if you’re not using your credit cards sensibly, you may be doing harm to your credit rating.

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Avoiding Credit Card Fees

Pam — Mon, 12 Mar 2012 22:00:54 +0000

For most people, using credit cards has become a way of life. Whether you have one card you use occasionally, or several you use on a regular basis, you may find that using a credit card is easy and convenient. But one aspect of credit cards that isn’t so easy and convenient is their fees.

From basic annual fees to currency exchange fees, these often hidden costs can add up and cost users hundreds if not thousands of dollars. Many credit card users aren’t even aware of some of the fees they pay, or that they may have to pay under certain circumstances, but most would agree that they’d rather not pay extra fees. The best way to keep from incurring these fees is to make sure you know what they are so you can avoid them. Here’s a look at some fees you might encounter, and how to keep from having to pay them.

Credit Card Annual Fees

This is one fee that few, if any, credit card users should ever have to pay – you can simply choose a card with no annual fee. However, you may choose to pay one if it offers genuine value for money. An annual fee is just what it sounds like: it is a fee charged each year just for having the credit card. Most annual fees are a set amount that is automatically charged to your card each year.

If you are looking for a new credit card, you may look for one that doesn’t have an annual fee, or you may look for one whose annual fee brings you a host of truly useful rewards. If you already have a credit card, find out whether you’re being charged an annual fee. If you are paying annual fees, but you’re not getting any added value in return, talk to your credit card company and ask about removing this charge along with its offered benefits.

Credit Card Late Fees

Imagine that you lost track of the date and were a couple of days late paying a credit card bill. That simple mistake may cost you $25 to $50 if the credit card company charges you a late fee. This may end up costing you even more, as some credit card companies may increase your interest rate if you make a late payment. In addition, having to pay the fee means less of your money is going toward the principal balance on your credit card bill, so the amount you’ll pay interest on will be greater as well.

Avoiding a late fee is pretty simple; just pay your bill on time. One easy way to do this is to set up your credit card payments to be automatically taken out of your bank account each month. By doing that, you’ll never be late paying your bill, and you’ll never have to pay another late fee.

Over the Limit Fees

When you have a credit card, you have a maximum spending limit. This limit may vary and is based on many things such as your credit score, how long you’ve had the card, you income and other factors. But whether your limit is $500 or $5,000, you are not supposed to go over this amount. If you do, you will incur an over the limit fee.

The key to avoiding over the limit fees is to always be aware of how much you have charged on your card. If you use your card on a regular basis, it’s easy to lose track of how much you have spent. Check your balance online or by calling your credit card company. Another way to avoid late feed is to not get anywhere close to your limit, and pay off your entire balance each month.

Cash Advance Fees

A very convenient aspect of most credit cards is the ability to go to an ATM and get a cash advance. This is especially handy while on holiday, and many people take advantage of this feature. However, every time you use the cash advance feature, you may be charged a fee.

With proper money management, you really shouldn’t ever have to use cash advances from your credit card. If you are going to need cash, try to get it from your checking account. Getting a cash advance from your credit card should ideally only be done in an emergency.

Currency Conversion Fees

If you travel overseas a lot or shop online with overseas merchants, you may be charged a currency conversion fee by your credit card. Some cards charge up to 3.5% for their currency conversion fees, and some people may not even realize they are being charged this fee. Check with your card to find out what the fee is, then keep that in mind when making purchases overseas and online. It may be better value to use the local currency when making purchases, so plan ahead when travelling and try to avoid using credit cards where other payment methods are possible.

Avoiding Fees In General

The national credit card debt for Australia is now over $36 billion, an average of more than $4,700 per person. That’s a lot of money to pay back, and each year, credit card holders are charged millions of dollars in fees, some of which they don’t even realize exist. One way to avoid those fees is to avoid credit cards altogether, but that isn’t the only way to avoid fees.

The key to avoiding credit card fees is knowing exactly what fees your credit card charges. With this knowledge, you can take the necessary steps to keep from having to pay extra fees, meaning you can concentrate on keeping your debt lower and your credit cards paid off.

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Things to Avoid Charging to Your Credit Card

JE Cornett — Thu, 08 Mar 2012 21:57:36 +0000

The ease of using a credit card makes it tempting to swipe plastic for even the most trivial expenses. However, unless your bank balance is growing at the same rate you’re charging purchases on your card, you may be in for a rude awakening when your credit card bill arrives.

While there are plenty of perfectly good reasons to use a credit card — travel, emergencies, rental cars — there are times when you may have other lower-interest options to choose from.

Student Costs

One of the rites of passage when going to uni is getting a credit card. But if you’re using your credit card to charge your educational expenses, such as tuition, fees, books and other school-related costs, you could be setting yourself up for debt trouble before you even graduate. It doesn’t take long for the costs associated with attending university to reach the five-digit range, or even higher.

If you’re having trouble meeting your financial obligations for university, consider taking out a student loan to pay the costs of uni. The interest rates are lower than those associated with credit card bills, and the monthly payments are lower, as well. Better still, you won’t be required to repay most student loans until after you’ve graduated, which gives you time to establish a career before you start paying back your loan.

Wedding Costs

The wedding industry is growing by leaps and bounds, with even many of the more conservative brides and grooms spending thousands of dollars on their nuptials. If you can afford it, that’s great, but if you plan to pay for your big fat expensive wedding by putting it on plastic, it’s time to rethink your idea of the perfect wedding.

Going into serious debt for a wedding can not only destroy your finances and your credit, it can also destroy your new marriage. Adjusting to married life is difficult enough without adding crushing debt to the list of changes you’ll be required to adjust to. If paying outright for the wedding of your dreams is out of the question, consider scaling your wedding back, or delaying the date until you’ve saved up enough to pay for it.

Vacation Costs

You’ve spent hours checking airfare websites, looking for the best deal. You’ve compared rental cars and hotels, trying to save money wherever possible. If you plan to charge the costs of your vacation to a credit card you cannot pay off in the short-term, then you’ve wasted your time searching for the best travel deals — the interest you’ll pay on your charges may eat up any savings you may have realized, and add back some more costs, as well.

Credit cards are often touted as the preferred method of paying for the costs associated with travel, such as airfare, rental cars, hotels and meals. However, that’s assuming that you have the ready cash to pay off your credit card in full as soon as you return from your trip. And don’t over-use the rationalisation that you’ll be earning airline miles or other credit card rewards, because unless you can repay your charges soon, those rewards are worth much less than the interest you’ll be paying.

There are times when using your credit card is the wisest course of action, but in some situations, you’re better off looking for an alternative way to pay, especially if you’ll be unable to pay your credit card off in a matter of weeks or months.

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Get the Most out of Your Credit Card

Chris — Mon, 27 Feb 2012 22:42:40 +0000

No two credit cards are exactly the same. This also holds true with consumers. It’s important that you get the most out of your credit card. As something you will use on a regular basis, your credit card will be a big part of your life. Choosing the right one will allow you to better organize and spend your money.

Compare your Options

You must compare several offers to ensure that you get the most out of your credit card. Do you know which financial institution you want to do business with? Is there a particular type of offer such as a zero interest balance transfer or rewards program that you are focused on? By comparing multiple options it becomes easier to determine what is best for you at the present time.

Know the Details

Every credit card has something unique to offer. Even when two cards appear to be identical, there are finer details that will not be exactly the same. From the interest rate to the rewards program and much more, you need to focus on the details that are most important to you. The last thing you want is to be surprised by something you were not expecting.

Use it Wisely

If you truly want to get the most out of your credit card you need to use it wisely. This means using your credit card when you know that it makes sense and keeping it in your pocket if you feel that it could get you in financial trouble.

Are you worried that you are not responsible enough to carry a credit card? In this case, you may want to avoid applying for an offer at the present time.

Reward Program Benefits

With the right reward program, you can receive points for every dollar that you spend on your credit card. In short, this allows you to get something back every time you make a purchase. Once you have enough points, you can then cash them in for a variety of rewards, from household electronics to hotel stays and flights.

Final tip: read as many credit card reviews as possible before making a final decision. What are other people saying? What do they like about the card? What do they dislike about the card? You may be surprised at all the information you find. After all, you are not the only person interested in carrying a credit card.

Everybody has their own system for finding and applying for credit cards. Where are you going to start? To get the most out of your credit card, you need to choose the right offer and then use your buying power wisely. It is easy to go overboard, making purchases that you are unable to afford.

If nothing else, make sure you have a solid grasp on what your options are as well as which credit card would do you the most good. When you make an informed decision, you will be able to get the most out of your credit card for many years to come.

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More Myths and Misconceptions About Credit Cards

JE Cornett — Mon, 20 Feb 2012 21:44:30 +0000

As long as there’s plastic in our pockets, there will be myths and misconceptions about credit cards. From confusion about closing credit card accounts to the effect that they have on your credit, urban legends about credit cards abound. Here are a few more common myths and misconceptions:

Misconception: Pay Off Credit Card Debt By Transferring Balances

The balance transfer credit card trick may be one of the oldest in the book for paying off credit card debt, but the fact that many have tried it with success doesn’t mean that it’s the safest or best way to reduce your debt. Transferring the balance from a big credit card debt to a credit card with zero or low interest can help you make a dent in your credit card balances, but only if you read the small print and make an effort to pay the best as quickly as possible.

First, make sure that the zero or low interest rate applies to balance transfers. Advertising a low or no balance card, but only applying the low or no interest to new purchases is a tactic that credit card issuers have been employing for years. If that low interest rate does apply to balance transfers, make sure that two conditions apply after the introductory rate ends:

The interest rate should be lower than the one you’re currently paying.
You should be in a situation that allows you to pay the balance down so that it is less than 75% of your available credit on the card. Otherwise, you’ll have an almost maxed-out card as soon as the introductory rate ends, and that never looks good on your credit.

Myth: Closing Credit Card Accounts Will Help My Credit

The myth that closing credit card accounts is good for your credit is one that has persisted for years, despite the fact that the opposite is often true — closing accounts can hurt your credit score rather than help it. If you have four credit cards, two of which have a zero balance and two on which you have charged 50-75% of your available credit, closing the paid off cards automatically raises your debt to credit ratio, and therefore hurts your credit.

Closing old credit card accounts and keeping newer accounts instead may have the same effect. It’s almost always better to have several open credit card accounts than to close all but one or two. If you fear accumulating debt simply because you have the cards, then cut up the cards or put them in a safe or safe deposit box where they cannot lead you into temptation.

Misconception: Using Credit Cards is Bad for My Credit

As the recession drags on and the spectre of credit card debt looms over many, using credit cards has gotten a bad rap. Credit cards are credited as being the fast track to deep debt and poor credit, but only one of those statements is true — while using credit cards recklessly can lead to debt, using a credit card is actually good for your credit. As long as you pay as agreed, that is.

Using credit cards responsibly, which means carrying a low balance or paying your card off in full each month, paying on time as agreed, and not opening more and more credit card accounts, can actually improve your credit score more quickly than your payments on an instalment loan such as a car loan or a mortgage. It’s only when you become irresponsible with credit cards that you damage your credit.

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College Students and Credit Cards

Pam — Thu, 16 Feb 2012 21:21:28 +0000

Oh, the joys of being a college student. I remember walking into the student centre my first year, and there was so much going on. There were clubs to join, food plans to choose from, free samples and coupons and, of course, credit card offers. It was exciting, and a little overwhelming. So many choices, and some of those choices would affect my entire life.

Studies show that over 75% of college students have a credit card, and they can be a great asset for a student. Credit cards are convenient, can help build a good credit history and can help young people learn money management skills. However, if used incorrectly, credit cards can get students in financial trouble before they even get out of school. Here’s a look at some common credit card missteps college students make, and how to avoid them.

Spending Too Much

When you first get a credit card, it’s tempting to take it and go on a shopping spree. You can hit the mall and come out with a whole new wardrobe as well as some cool items for your room without having to fork out any cash. Fun at the time, but what about when the bill for those items comes due? Young credit card users may get a bit carried away, spending more than they can really afford, then having trouble paying their bills.

Making Only the Minimum Payment

When the credit card bill arrives, the total due may be alarming, but many young credit users feel better when they see the minimum payment due. The minimum payment due is a percentage of the total due. Paying the minimum due is all that is required each month, but never paying more can lead to problems. You will be charged interest on the balance, and if you only pay the minimum amount due it’s easy to get into long-term debt.

Getting Too Many Cards

With so many credit card offers out there, it’s sometimes tempting to get more than one card. A recent study showed that half of college students in America had more than four credit cards. Having that many credit cards just increases the likelihood of getting into financial trouble. Many students end up getting additional cards when they near their credit limit on one card, but doing so just puts them deeper in dept.

These are just some of the ways college students can get into financial trouble with credit cards. But just because credit cards can cause trouble, that doesn’t mean they should be avoided entirely. Learning how to manage money is an important part of becoming an adult, and credit cards can help. Here’s a look at how to use credit cards wisely.

Pay In Full Each Month

The best way to use a credit card, build your credit and avoid finance charges is to simply pay off the entire balance each month. Ignore the minimum payment, and pay the total due. To do this, you must not charge more than you can afford. Young people should keep their charges to a minimum each month so they don’t get in over their heads.

Consider a Prepaid Card

If you really want to avoid charging more than you can afford, you might like a prepaid credit card. Instead of offering you a line of credit, these cards require you to deposit money upfront which you can then access using your charge card. This is a great option for parents wanting to help their college students learn to use credit cards without the risk of ending up in debt.

Another option is using a debit card instead. A debit card, also known as a bank card, is a card that allows access to funds in your bank account. When paying with a debit card, money is transferred from the user’s bank account to pay the price of the items purchased.

Learn to Live on a Budget

Learning to live on a budget will not only keep students out of debt, it will also teach one of the most important parts of being financially responsible. Creating a budget simply involves making a spending plan based on income. If you use a credit card wisely while sticking to a budget, then you’ll be able to pay off the balance on time and in full each month.

Credit cards can be great to have for a college student, and if used carefully, they can help make a student’s life easier while also helping them build their credit. If you are a parent sending your child off to college, sit down and talk to them about how to use credit cards wisely and staying out of credit card trouble. Doing so will help them take the first step toward a secure financial future.

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Using Your Credit Card to Budget

Robert — Mon, 13 Feb 2012 21:47:14 +0000

A lot of people immediately attach a negative connotation to the idea of using a credit card for spending. And no wonder, when there have been numerous horror stories regarding people with credit card bills they can’t pay off, those who have gotten themselves so deep in credit card debt that all they earn just goes to collection agencies, or people whose credit has been ruined by overspending on credit cards.

It’s Not the Credit Card’s Fault

But credit cards themselves aren’t evil; it’s the way you use them that makes your financial situation good or bad. When used properly, credit cards can actually be helpful, and using your credit card to budget is possible. One way to do this is to start by using only one credit card for spending, rather than several.

If you are going to use a credit card, consider using one that offers a reward. There are many different types of reward credit cards available: cash back, gift points, travel insurance, and more. By using a single card that offers rewards, you essentially get a value back from your purchases. Be cautious, however, as some rewards cards involve unnecessary fees that could negate any rewards you earn.

Developing Discipline

In addition, having just one card limits your spending activity and will help you practice discipline. When you know you only have so much to spend, you’re less likely to start impulse buying. In order to give you more breathing room in your budget, you may want to consider a credit card with a relatively low interest rate.

There are many credit card companies that offer low interest rates that you may take advantage of, and also those that offer zero interest for a certain period of time. By having a lower interest rate, you may reduce the interest charges on any balance you haven’t paid by the time your next statement is calculated. However, be aware that introductory rates will eventually end, and you may then face a higher interest rate.

Instead of worrying about your interest charges, you could simply pay off your balance in full each month. Then, you will have no interest to pay, but you will become eligible for rewards as outlined in the terms of your reward credit card.

Calculate how much you’ll have to pay each month to keep your credit card free from interest, so that you can include this in the normal budget you make for other items such as household bills, groceries and so on. The idea behind making a budget is to make sure that you earn more than you spend. This means you should take into consideration all factors in your spending habits. You can use budget-making software or basic computer programs to help with calculations, and get an idea of where to set your spending limits.

Lastly, budgeting means you have to stick to your goals. Keep track of your spending so that you don’t go over your credit card limit, or look into getting a credit card with set spending limits that prevent overspending. Some credit card companies offer free budgeting tools to help stay on top of your finances.

With enough self-control, you’ll find that using a credit card isn’t as bad for money management as it is sometimes made out to be. If you stick to well-thought-out plans, you’ll be able to keep yourself above water financially!

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Tips for Credit Card Comparison Beginners

Sally Aquire — Thu, 02 Feb 2012 21:21:32 +0000

Not all credit cards are created equal, so it’s important to compare credit cards to make sure that you’re choosing the right one for your needs. It can be confusing to know how to compare credit cards, especially if you’ve never taken the time to do so before. Here are some things to consider.

What Do You Want from Your Credit Card?

There are various types of credit cards, so you need to think about what you’re looking to get from your choice and pick the right card for your needs. You also need to factor your money management into this. For example, do you make a point of paying off your balance in full every month? If you do, you’re not necessarily going to be after the same type of credit card as someone who is regularly carrying a balance over to the next month.

Credit Card Interest Rates

There are three interest rates to be aware of:

Balance transfer fees and interest rates which apply to debt being carried over from another credit card
Purchase interest rates which apply to purchases made using the credit card
Cash withdrawal interest and fees which apply to cash withdrawals made using your credit card at ATMs.

Many credit cards have introductory interest rates which revert back to the regular rate after a certain amount of time, so it’s important to check whether this is going to be the case. If you’re not necessarily intending to use your credit card straight away, look for one that is offering a low interest rate all the time, rather than one which only has low interest for a certain time period.

Interest Free Days

How long a time will you have between making a purchase and needing to pay for it? Typically, it is somewhere between 30 and 60 days. If you’re confident that you’ll be able to pay off your balance relatively quickly, a credit card like this may allow you to budget your spending without incurring extra credit card charges such as interest and fees.

Not all credit cards may have an interest free period on new purchases, though. There may be higher fees and interest rates on credit cards that offer a longer payment period but if you always pay your balance before it incurs any interest, this shouldn’t affect you.

Credit Card Fees

Some credit cards have an annual fee, which isn’t always a bad thing. Some credit cards that charge an annual fee may come with more attractive interest rates, or more appealing rewards, so don’t dismiss them out of hand.

Other fees to look at are cash transaction fees if you use your credit card to make cash withdrawals, and foreign transaction fees if you may be using your credit card abroad at any point. Watch out for any other credit card fees or charges, which won’t necessarily be prominently advertised. You should be able to find the small print on the credit card provider’s website or other documentation.

Credit Card Rewards

If you’re in the habit of using your credit card regularly and paying off your balance in full every month, interest rates are less of a factor, and you may be more interested in a credit card that rewards you for using it. However, rewards credit cards may have higher interest and fees attached. Rewards can come in a variety of forms, but points can often be redeemed for goods or air miles. Check if there are any restrictions on using these rewards.

Credit Card Fraud Protection

Check also whether your desired credit card offers protection against identity theft. Credit card fraud is becoming more and more common these days, and you’ll want to know that your credit card company will help you get things straightened out if you’re affected.

If you’ve never previously taken the time to compare credit cards, it’s definitely worth the effort to make sure that you’re choosing a credit card that suits your needs. Going for the wrong type of credit card may mean that you end up paying more in interest and charges in the long term. Think carefully about your typical approach to money management and let that influence the type of credit card that you opt for.

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