How to pick the right Credit Card

It really is remarkable how little thought most people put into choosing a credit card. Given that it is one of the most important financial decisions that you will ever make it is probably a good idea to think about which card is right for you rather than just filling out any application that comes in the mail.

The most important thing when you are choosing a credit card is the interest rate. There can be a surprising variation from one credit card to another when it comes to interest rates. Of course if you are going to pay off your balance in full every month it really won't matter, but since very few people do this you should pay attention to the interest rate. If you do carry a balance you will be paying that interest every month for many years so you want to try to limit this as much as possible, even a small savings on the interest rate can be very helpful.

One thing to pay attention to when you are looking at the interest rate is the introductory rate. This is usually very low and it can be a great way to help you get your credit card debt under control if you transfer your outstanding balance to the new card with the low rate. However you have to be careful here, you have to know what the regular rate will be once the introductory rate expires. If this is a lot higher than what you are paying on your current card it probably isn't a good idea to make the change.

The next thing that you are going to want to look at when you are choosing a credit card is any fees that may be charged. This can be tricky since you need to combine this with the interest rate to determine what the best deal is. You may find that a card that has an annual fee but offers a low interest rate will be the best deal if you carry a large balance. However if you always pay off your balance you are probably going to want a card that comes with no fees even if the interest rates are higher. To make this decision you need to realistically assess how you plan to use your card.

The last consideration that you are going to have when you are choosing a credit card is any rewards that they offer. Most cards these days offer some sort of reward and this can be a great way to save yourself some money. The big thing here is to make sure that you don't take a card that offers a high interest rate or large fees just because they offer the best rewards, you will almost certainly pay more in extra fees and interest than the value of the reward. The other thing is to make sure that the reward is something that you are actually going to use.