On question often asked is “what’s the best credit card available?” The truth of the matter is that there is no one credit card available that is the best for everyone. Choosing the right credit card for you has more to do with your credit card spending and repayment patterns than anything else.
In order to find out which credit card is best you need to think about your credit card usage. For example, do you pay the balance in full each month, do you carry debt over and incur interest and so on. See which of the statements below fits your credit card usage.
“I don’t pay by credit card bill in full each month”
If you carry a balance over from month to month, you need to look for the lowest rate interest card available. Some cards charge high rates of 18% and upwards per annum, others charge less than 10% per annum. The interest rate makes a huge difference to the monthly minimum repayment amounts and also the ease at which you can pay down debt. A low interest rate is more important than a rewards program if you are carrying debt.
“I only use a credit card occasionally and normally pay it off each month”
If you are a light credit card user and tend to pay it off in full each month then the most important factors to consider will be the cards annual fee and the number of interest free days on purchases. Many credit card issuers have cards with no annual fees. They tend to offer less in the way of rewards schemes but as a light user you are unlikely to benefit from such schemes. Look for cards with a low or no annual fee offering instant rewards and discounts. These are partner offers that can be used at any time without accumulating points.
“I buy most things with my credit card and then to pay if off each month”
If you do most of your spending via your credit card and tend to pay it off each month then you may benefit from a credit card offering a rewards scheme. Often rewards credit cards have higher interest rates or annual fees than other types of credit cards. However, interest rates are not important so long you pay the bill each month and the rewards could well exceed the card fee. Frequent flyer credit cards are the most popular type of reward card. A spend of around $2000 per month can earn the equivalent of 4 short haul return flights per year with many airlines.
Other factors to consider when choosing a credit card
Interest free days:
When looking for the right credit card for you, you will find that there are two main types of credit cards: those that offer interest free days and those that don’t. Generally, those that offer interest days charge a higher interest rate after the end of the interest free period or charge an annual fee to compensate. Many credit card companies now offer to up to 55 days interest free on purchases. Cash advances normally incur interest straight away and often at a higher rate than purchases.
Late payment penalties: When evaluating which credit card is right for you, it is important to consider the late payment penalties. If a late fee is charged, what is it? Is an increased interest rate also enforced as a penalty? Some companies more than double your interest charges if you pay late even by one day.
Customer service: It is also helpful to consider a company’s track record in looking after their clients. Why not phone the customer service lines of your short listed credit card companies? Who do you want to deal with? Are you kept on hold for an excessive length of time before someone takes your call or are you answered quickly? If you can’t get good customer service from a company, you should probably forget them. Another important consideration is whether they are using overseas call centres that have access to customer’s private details. If you don’t have a problem with this, fine.
Conclusion
If you intend to use your credit card to pay bills and will pay the complete balance each month, look for a credit card that offers the best value in terms of interest free days and rewards. However, if you are going to be in debt from month to month, look for the lowest interest rate, lowest annual fee and fairest calculation of penalties (because things can go wrong sometimes).
If you are juggling a number of credit cards of varying interest rates and have overall high monthly payments because of credit card debt, then consolidating your credit card debt on one low rate interest card could be the answer you are looking for. By consolidating your credit card debt on one low rate card, you will dramatically reduce your minimum monthly credit card costs and improve your ability to pay down debt.
Debt consolidation, using a low rate credit card, can also provide more flexibility than a personal loan. If an emergency occurs then the credit is still there to use. The obvious risk to this, however, is using the credit and never getting out of debt. Debt consolidation with a credit card requires discipline and commitment to get out of debt.
Best Credit Cards Summary – The right credit card for you
Carry balance over each month = Low interest credit cards
High levels of existing debt to pay off = Low interest / balance transfer credit cards
Pay balance off in full each month / low credit card usage = no annual fee credit cards
Pay balance off in full each month / medium-high credit card usage = rewards credit cards
Richard Greenwood
http://www.articlesbase.com/credit-articles/best-credit-cards-how-to-find-the-right-card-for-you-108287.html
March 18th, 2010 at 4:46 pm
whats is the best credit card for a student? i want an amex is that okay? can n e one help find the right card
im turning 18 make about 7000 a year i want an amex cause they look bad ass what credit card do u recomend be honest and dont try to promote your bank please! whats the diffrence between a amex from bank of america and an amex from Amex? what are the flaws to both? which one would benefit me the most?
how do reward points turn in money? if not how do they work?
March 18th, 2010 at 9:48 pm
Once upon a time, a classic Amex green card was a good idea for a new CC user: small annual fee, had to pay off the bill every month to keep using the card. That kind of card doesn’t seem to be available any more.
So – get a card that has zero annual fee, has as low an interest rate and late fees as possible, and comes from a reputable bank. Check with your bank to see if they offer a credit card; deal with the institution where you’re already doing business.
Ignore any kind of brand name chic. A card looking ‘cool’ doesn’t add anything to its value. You’re buying stuff with it and paying off the balance every month. (Plan to pay it off EVERY MONTH!! Late fees and interest will eat you alive.)
Points, generally, are traded for merchandise or travel. They don’t convert to cash, though some convert to rebates or discounts.
Shop around, compare rates and fees, and benefits. Ignore what color the card is. It’s just a piece of plastic that’s a way of managing your money.
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March 18th, 2010 at 9:50 pm
"what credit card do u recomend", No credit card. AMEX may look bad***, yet there is a monthly bill to pay in full each month. An Amex card distributed by bank of America is just another line of credit backed by the AMEX logo. Do you have a checking account? If no, get one. Learn to use it wisely. Get a bank check card attached to your checking account. Pay for things using it as a credit card so you sign for all purchases, avoids fraud. Only spend what you have allotted from your checking account. $7,000.00 per year is not big money. Enroll in college and get an education. Then, you will be able to answer this question with your own knowledge.
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March 18th, 2010 at 9:52 pm
Well at under 18 I would assume you have no credit history so Amex will be reluctant to give you a card. They also consider your income which according to me is not the best. Amex cards have annual fees and you need to pay them in full at the end of the month. If you withdraw cash using it then they will charge you interest from that day on. I would suggest getting a debit card from a bank you already have an account. Debit cards are no different than a credit one and you can withdraw cash too using them. I dont think there is any difference between the Amexes. You can try prepaid credit cards too. Amex does not sound interesting to me with the annual fees. Also it is not accepted at many places, even if it is merchants do not prefer Amex because it means cutting into their own profits. Points do not turn into money. In reality they only encourage you to use your card more often which ultimately will benefit only Amex in your case. A Visa is anytime better than an Amex.
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March 18th, 2010 at 9:54 pm
There are a few different options out there and all depends on your credit, credit cards with rewards are the best but you have to make sure you make your payments on time so you do not pay interest, check out http://www.fastcreditcardapprovals.com here they have all major credit cards and you are able to compare them all side by side.
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March 18th, 2010 at 9:56 pm
I wish I was still a student so I could get the Citi mtvU card which offers 5% rewards at restaurants and entertainment. The Citi Driver’s Edge for Students is great for rewards at gas stations, grocery stores, and drug stores.
There are lots of other great rewards cards for students. You can use this rewards calculator to see which credit card will pay you the most for your normal spending:
http://www.creditcardtuneup.com/?card_type=College+Student
References :
http://www.uthunk.com/