Choosing a Credit Card

Credit cards have become a part of everyday life for most people living in the western world. It’s becoming increasingly impossible to avoid them especially for those involved in business. So if it is the first time you are seeking to enter into the world of plastic money, here are some of the basic things you should look out for.

First, compare the interest rates for all the credit cards for which you are eligible. While the rate may not remain fixed indefinitely (read the small print for conditions), it’s always advisable for first timers to go for the one charging lower rates. Some cards have 0% interest for an initial period, which is a valuable offer.

Read the fine print, especially on the other charges that may be charged on you, like late-payment fees, annual fees, and whether there is a grace period which is normally given before the finance charges kick in.

Decide what limit is appropriate for a person of your income. Also the fewer credit cards you have, the better placed you are to track your spending.

Compare the services and other features such as the cash back incentives, or warranties, rebates and the like.

Check whether the card is widely accepted to enable you to pay for your needs.

You will do yourself a favor by familiarizing yourself with the following terms.

Annual Percentage Rate (APR). This is the measure of the yearly cost of credit.

Finance Charges. These are the total charges involving the transaction. This is the period the issuer gives you before he starts charging you interest on new purchases. Note that not all credit cards have a grace period.