Two Things To Look For In A Good Credit Card
There are two main things that one should look for when trying to select a good credit card.
The first, and certainly the most important, is the interest rate on the card. While many cards offer introductory rates, such as 0% APR for a year, charging customers interest is how these companies generate their profit. Take for example the Citi Platinum Select Mastercard. With this card, Citi offers customers 0% APR on balance transfers and purchases for the first 12 months they have their cards. However, it is important for the savvy customer to note that, in the fine print, the company states that after those first 12 months, the variable interest rate jumps to at least 12.99%.
A good credit card will have a low interest rate that is fixed. As for these advertised offers, not all customers should assume that they will be eligible for the 0% APR or later an interest rate of 12.99%. Customers should do their homework as to how good their credit must be to qualify for the best interest rates. For example, to qualify for the 0% introductory APR for the Citi Platinum Select card, a customer has to have good to excellent credit. Citi seems to give a little more flexibility with regard to ones credit than Capital One who states that only applicants showing excellent credit are eligible for their 0% introductory rate. Though a card may look good because of their advertised introductory offers, a good credit card will offer reasonable rates for the life of the card.
Another thing to look for in a credit card is what it has to offer you. A good credit will reward you through airline miles, cash back, etc. While interest rates are important to know, if you are someone who always pays off their credit card in full every month, a credit card company’s rewards program can help distinguish an average card from a good card. Take for example the Discover More card from Discover Card. With this card, customers receive cash back on all their purchases, that cash amount ranging from 1% to 5%. In addition, Discover has a program called Cashback Bonus where customers can get between 5% to 20% cash back through Discover’s online shopping site. In this way, when cardholders buy items they would have anyway, a good credit card will save them money while doing so.
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For the past 20 years, I have had a Discover Credit Card. When comparing this good credit card to other cards, such as Visa, MasterCard, American Express, the Discover Card experience is overall superior to the benefits offered by the other big three. Long before it was popular, Discover Card was the first to offer a cash back bonus.
As its popularity grew, its general acceptance by merchants has increased and continues to increase as of today. The only drawback to using a Discover Card is that some local businesses/merchants may not accept Discover Card. The reasoning is that the fees charged by Discover Card to the merchant are generally higher than other credit card companies.
American Express is a brand name which is a part of the American lexicon. Originally, American Express only offered one kind of repayment term; namely, the full balance would be due at the end of the month. It’s not one of the more popular first time credit cards.
After seeking its market share of credit card users slowly erode, American express introduced the Optima card which would allow you to make incremental payments over time. While the vast majority of merchants accept American Express, aggressive market tactics by Visa have on occasion frozen American Express out of certain markets.
The best example would be the advertisements for past Olympic Games which suggested you use the Visa credit card to purchase your tickets, because the ticket seller would not accept American Express. One additional problem with American Express which occurred was the increase in its fees charged to merchants when their customers would charge a purchase.
This did cause certain high end merchants, such as car dealers, to no longer accept deposits or charges on American Express. While American Express has improved its card benefits, it appears American Express is generally a half a step behind their competitors. Finally, you have Visa and MasterCard.
I am old enough to remember when these two credit card giants were not affiliated with any bank or other financial institutions and were simply Visa or MasterCard. Overall, a Visa or MasterCard is easier to use than American Express or Discover, inasmuch as the credit terms can be very competitive, and they generally have looser credit requirements for individuals who are trying to reestablish their credit.
Overall, which card you use is a personal choice. For me, it’s Discover Card. The idea that I always get money back, even if it is nickels and dimes, is better than airline mileage or points which only give you a source of products which Visa, MasterCard or American Express what you to buy.
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