Which Credit Card Is Best for Me?

Picking the right credit card can be confusing because of the many options. Not only are there different cards from different banks but within many banks there is more than one credit card being offered with different features. Understand the options, and you can pick the card that best meets your needs.

Shop Multiple Cards

Consider card offerings from more than one financial institution. Don't rely on mailed-in offers. Be proactive and call several financial institutions to find out what is the best offer they have. Let the credit card company representative you are talking to know you are looking at several companies and want the best deal. The representatives have been trained to sell you the most profitable card for the credit card companies and will not necessarily offer you the lowest-rate card unless you ask for it.

Interest Rate

One of the key considerations is the interest rate the card is offering you. Although it may seem simple to compare rates, many rate structures are more complex. Some rates may be for an introductory period only. The rate on a balance transfer may be different from the rate calculated on a direct purchase using the card.

Other Hidden Charges

Familiarize yourself with other charges such as late payment fees, over limit fees and additional balance transfer charges. These less obvious charges can make the true interest rate you are paying on your card become much higher than you are aware of

Rewards

Many cards offer rewards. Consider each and determine which are important to you in terms of simple convenience and direct or indirect dollar savings. Cards can offer a direct cash back savings, discounts on purchases, accumulated frequent flyer mileage and a variety of gifts. Don't be swayed by gifts only in making your credit card decision because other factors such as interest rates over the long term are more important.

Transaction Reporting

If you will be using your card for business, reporting could be important. Some cards provide a year-end summary of purchases by category and in date sequence order. Others provide the ability to download your purchases into an accounting program or spreadsheet. This makes it easier for you to prepare tax returns or provide transaction data to your accountant. It also helps you make sure that you take all of the business tax deductions you are entitled to.