There really are an amazing variety of credit cards available to
today's consumers; the number of options is simply staggering.
Virtually every company around these days has some form of
affiliated credit card option available to its customers. While
most of these cards are affiliated to one of the major credit
card brands, such as Visa, Mastercard, or American Express, they
still represent a major source of options from which to choose
from. That is why it is important the go back to basics, and
remember what are the fundamental reasons you opt for a credit
card in the first place.
Below are some of the reasons we look for credit cards and some
of the features we should be able to find in them, if they
really are as good an offer as they claim to be.
-Is the credit card offered by a company you know and trust?
-What is the annual percentage rate (APR) for the card?
-Is this a temporary, introductory or permanent rate?
-What is the credit limit they have offered you?
-How often are you billed?
-How are repayments calculated and is the outstanding balance
free of interest if you pay off the full amount each month?
-Are there other charges or fees associated with the card?
These are all important questions you should be asking yourself
before sending that application form back to the company.
However, while these may seem like straightforward questions
with simple answers, they may not be as clear cut as they seem.
For example, your bank will usually be a company that you are
familiar with and know you can trust. However, this does not
automatically mean you should accept a credit card from them.
This is not because the terms will be unfavourable compared to
other lenders but rather because you should be thinking of the
consequences if you prove unable to repay your credit card
bills. While it is no doubt a serious matter to fall behind in
credit card payments, for most people, this will be even more
serious if this is also their bank that controls their mortgage
and other finances.
Also, while the APR will be calculated in a standard way for all
lenders, this is not the only aspect of the price of the card
that you should be looking at. While the APR may seem
attractive, it will be less so if the company levy hefty charges
for late payment or reserve to right to alter your interest rate
in the future.
Also, if your choice of credit card is based on the rewards that
are being offered by that particular card, you should take into
consideration any of the small print associated with the
awarding of these rewards. For example, did you know that if you
go above your credit limit with certain credit cards you forfeit
all rewards that would have been awarded on your spending in
that month? Also, the same may apply if you fail to make at
least the minimum payment in any given month, the credit card
company may withdraw your rewards for this too.
In short, while getting your hands on a credit card may be
easier today than it has been in the past, and there are a host
of companies out there willing to lend to you, you should
remember that credit card agreements are complex contracts and
you should think about all the aspects of it before you get
involved.
About the author:
Joseph Kenny is the webmaster of the UK credit card comparison
site
http://www.creditcards121.co
m/, where you can find a selection of
credit card articles. He also writes for the
comparison site
www.cardguide.co.uk which offers some
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