Credit cards are not a one-size-fits- all scenario. Choosing the right card can be the difference between a good and bad credit history, and can sometimes be a big factor in your ongoing financial stability. Here are some tips, inspired by Yahoo! Personal Finance, on 5 keys areas when choosing your credit card.
At The End Of The Month
If you’re unable to pay off your credit card at the end of the month, Yahoo! Personal Finance suggests looking for cards with 45 days of interest free and then cards that have the lowest interest on purchases. I would also suggest keeping credit use to a minimum until you’re able to pay it off at the end of the month.
If you’re planning on using your credit card frequently and for rewards programs, then an annual fee might be a worthwhile spend. You could be looking at anywhere between $50 to $250 a year, but if you’re redeeming your points for money-saving purchases like flights or accommodation, it might be a worthwhile investment. If, however, you’ve got the card as an emergency back up when you go overseas, you may as well just get a card that doesn’t have an annual fee.
When getting a credit card, it’s essential to weigh up whether any outlay on the card is a worthwhile investment. The same is as true of interest as it is of the annual fee. The card might have a high interest rate but if you can be certain you’re going to be able to pay it off at the end of every month, then those cards can also offer great rewards. Often, it’s stipulated you have to be earning over a certain amount to qualify to use the card.
Use It Everywhere
People look dismayed when they come to my work and pull out an Amex or Diners. Sure, we can transfer it. At the cost of a 3% surcharge, which usually precludes anyone from wanting to use it. Amex and Diners come with great rewards but a lot of businesses, at least in my town, have no interest in processing them so you have to rely on two cards. Recently, however, cards have been released where they are two cards in one (an Amex and Visa, or an Amex and Mastercard). So if you’re keen for the reward points, it could be worth investigating that option.
Credit cards are big business, and they want to make sure that they keep yours. Hence, the amazing world of bonuses for your credit cards. The most obvious, and the most commonly used, is the protection should you be a victim of fraud. If it happens on your credit card, the bank will usually cover you as part of your credit card contract. If the same thing happens on your debit card, you’re not always as lucky. Other bonuses can include short-term insurance on items bought on your credit card or little luxuries like privileged access to concert tickets when they go on sale and the best seats. If a credit card fulfils all your other criteria, a bonus scheme could be a great way for you to save a bit of money throughout the year.