How to select a credit card

Interest Rate

The first thing to look for in a credit card is the interest rate. It is very important that you select a comparatively low interest rate card as you will not like to default on your credit card payments. So with a low interest rate card, even if you miss your payments you still have a chance to pay off the amount plus the accumulated interest.

You need to read all the terms and conditions carefully to avoid any unforeseen circumstances. Go for a card from a good credit card company, and which comes with a genuine low interest rate offer. If you fall for introductory offers claiming low interest rates, you may find yourself in an awkward position. These offers last for a very short period, say for six months, and once the period is over, the interest rate on your credit card zooms. Also, the card companies might hike the interest rate if you make a late payment or exceed your credit limit.

Annual Fees

Today, most credit cards come with zero annual fees. These cards are also known as lifetime free cards. However, premium cards such as platinum cards or titanium cards charge an annual fee for privileges like more air miles, club membership, etc. Also, those with a poor credit history need to pay annual fees.

Even if there is no annual fee on a credit card, you must pay attention to the fee structures with service charges and late payment fees as many-a-time they are found to be very high.

Interest-free Days

It is very important that a credit card leaves you ample time to utilize the credit available for free. Here comes in the interest-free days. The more the interest-free days, the better it is for you. The interest-free period offered by most credit card companies is from 45 days to 55 days. However, be careful, you might have to pay a high interest rate or annual fee to make up for the benefit.

Perks or Benefits

Do we love to shop and dine out? Do we travel often? These questions you should ask yourself while getting a credit card, for there are cards to take care of your requirements and activities. You can avail of some good discounts and offers and save a good amount of money. For example, many credit card companies offer 2.5% surcharge waiver on fuel. Instead of paying out of pocket, if you use a credit card you not only get discounts but also earn reward points.

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