Choosing a Card

Of course rewards matter – but here are a few things to consider that are crucial to when making the important decision of taking on a new credit card!

What kind of card do you need?

It is important to consider what type of card you need. What will you be primarily using it for? Some credit cards are for building a good credit history, whilst others are specially designed to help you improve your credit history. With these types of cards, you will want to show that you can manage your debt well and keep up with repayments. Here, it is a good idea to have a small credit limit. If however, you have a lot of debt to manage you may want to think about getting a balance transfer card, paying attention to the APR on transfers.

How much money do you need?

Don’t be tempted to borrow more than you need. Limitless credit cards can have a negative effect on your credit score as they may appear as ‘maxed out ’  on your credit reports. Lower limits are good for first time borrowers.

How long will you have to pay your balance?

Often, you will have to pay the balance on your credit card within a 28 day period of receiving your bill. After this, you will have to pay late payment fees. Different credit card companies will vary the length of the payment period. Of course, the more time you have to pay your bill, the better! You are more likely to enjoy the convenience of your credit card without the costs piling up.

Annual Percentage Rate

Annual percentage rate or APR is probably one on the most talked about terms when banks are selling credit cards. However, it is not one that is always understood. APR  is the percentage charge you have to pay on your balance of your loan over the course of a year.  APR is a bottom line number which tells you the amount of interest that is associated with your loan.  APR will vary for cash advances, for balance transfers and purchases.  Consider this carefully in line with how you are likely to use the credit card.

Other Fees

To keep the cost of your credit card low, it is crucial to be aware of all the possible ways you might incur fines. Usually these include paying your balance late and going over your credit limit. Finally, some cards also have annual rate charges.

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