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Choosing the Right Credit Card
Not all credit
cards are equal and it’s important you have the credit card that
best matches your purchasing and payment habits. Here are some questions
to ask yourself:
- Will you be paying your balance off each
month? If the answer is yes than look for a card with no additional
fees, as the rate will not be a factor. If you can get a card with
a reward you are interested in, that is even better. However, remember
you must be able to pay off the balance, as the interest rate is higher
when compared to a non-reward card. If the answer is no, then look
for a card with the lowest possible interest rate. In either case,
look for the card with the longest interest-free grace period.
- Will you need cash advances? If the answer
is yes, look for a card with the lowest cash advance rate you can
find and no cash advance fee.
- Do you need additional financial services?
If you want your purchases insured, travel or car rental insurance,
there are cards that offer these types of features as incentives.
Be warned, sometimes these additional features mean additional interest,
if you are not paying off your balance each month the interest may
add up to more than the cost of the service if you purchased it separately.
- Are you switching balances from one card
to another? If the answer is yes, then look for a card that has a
low introductory or balance transfer rate. Make sure that you can
pay off the balance during the introductory period. After that, your
interest rate will go to the current market rate.
- Do you want equal monthly payments? If you
do, find a card that has a fixed payment amount – no matter
what your balance is. You can pay more, but your minimum monthly payment
will stay the same until the balance is paid-off.
For an interactive program to help you
pick the best credit card, check out the Financial Consumer Agency by
clicking
here. The tool will ask you questions and based on your answers,
display the credit cards that match your profile. It is easy to use
and has some great information.
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