Good Credit CardFinding A Good Credit Card
Not all credit cards offer the best features and rates. One must look at the terms and conditions carefully when selecting a credit card. The following characteristics comprise a good credit card.
No Annual Fees
Most credit cards do not require annual fees. That is because the credit card companies make a significant amount of their money off of credit card balances. Make certain that you choose a credit card with no annual fees.
Grace Period
Make certain your credit card has a reasonable grace period between payments. The shorter the time period, the more likely you’ll have interest rate payments (unless you pay off your balance monthly). Regardless, if the grace period is shorter, you have less access to cash flow for other purposes.
APR
The Annual Percentage rate should be as low as possibly offered. This is the interest rate you’ll be charged on any balances that you carry. An important thing to note is that the APR will be different for purchases, cash advances, and balance transfers. Cash advances typically have the highest rate, so if you use your credit card frequently for this purpose, you may want to review the terms and conditions closely for this feature. As it pertains to balance transfers, many credit cards offer introductory low APR transfers within the first few months of obtaining the credit card. If you can pay off this balance within the introductory period, than transferring balances may be appropriate for you. But be careful, because after the introductory rate, you may be charged a higher fee than what you’re paying today. Once again, please review the terms and conditions of the credit card. In addition, there are fixed APR rates and variable APR rates. In a rising interest rate environment, which we may be in the future, then one’s carrying balance will incur more interest charges. With fixed APR charges, you’ll be charged the same rate on your balances.
Incentives
This is a truly valuable feature credit card company’s offer. One can get brand specific credit cards and earn points on future purchases, such as Ford and Disney. By using a Disney credit card, one can accumulate points to be used at Disneyland or Disneyworld for vacations. There are many variety of incentives, which include cash back on purchases, educational donations (through Fidelity 529 plans), or earning miles to travel. These incentives are nice features which give you an extra incentive to utilize the credit card.
In summary, all of the above features should be examined carefully when selecting a credit card.