Comparison Shop for Credit Cards

It’s easy to find someone who wants to give you a credit card, but you have to be smart to get a good one.  Credit companies and credit card offers crop like weeds.  Choosing the best credit card requires smarts.  Let’s get smart.

Always take a look at the Schumer box.  What’s that?  By federal law – sponsored by Senator Charles Schumer – all credit card offerings have to include a box that includes nine different kinds of information about the credit card.  This box will appear on the credit card offer and is required to highlight certain provisions regarding the terms and conditions of a credit card offer. 

Here are some of the key pieces of information about the credit card and its required disclosures that will allow you to compare one credit card offer with another.

The Annual Percentage Rate or credit card APR.  This is confusing because card issuers can have introductory credit card interest rates that become a higher standard rate.  And then they can raise the credit card rate if you miss a credit card payment.  If there is an introductory rate, both the introductory rate APR and the credit card APR that applies after the time of the introductory rate.  Some credit cards have variable interest rates.  Make sure you know what the variance is based upon.  The variable rate information regarding how it is determined must be disclosed. 

Assume that you just can’t compare the APRs on two credit cards because there is a story behind the numbers.  They can also charge different interest rates for purchases, credit card balance transfers, and credit card cash advances. 

Other APR’s.  The credit card APR for activities such as: Cash advances, Balance transfers and the Penalty rate if you are delinquent on the account.

The Grace Period.  This is the number of days you have to pay your bill in full without getting a finance charge. 

The Finance Charge.  This is the dollar amount you pay to use credit, and it depends in part on your outstanding credit card balance and the annual percentage rate (APR).  Some credit cards have a minimum finance charge.  The minimum fixed finance charge must be disclosed on the agreement. 

Card issuers use different methods to calculate your outstanding credit card balance.  Your outstanding balance may be calculated over one or two billing cycles; including or excluding new purchases in the balance and by using the adjusted balance, average daily balance or previous balance.

The Outstanding Balance Computation.  As we said above in the section on finance charges, credit cards use different methods to come up with your outstanding credit card balance.  You may read it and scratch your head, but makes sure that you read it. 

The Actual Company Offering You Credit.  Sometimes this is not the same credit card company who is marketing the card.  If you recognize one name and not the other, it may make a difference.

The Annual Fee.  Some credit cards require a fee to be paid every year.  Why?  Because they can.  If you can get a credit card without an annual fee, get a new credit card.  You’ll probably save at least $50 a year.  Otherwise, the annual fee is an amount charged for each 12 month period for having the credit card.

The Minimum Payment.  Different issuers use different calculations to determine the credit card minimum payment.  It’s good to know what the minimum payment is, but if this become important to you, you are struggling.  If you are only making minimum credit card payments you are probably paying a lot in finance charges.  In this case, pay attention to the credit card interest rate and credit card apr.  If those numbers are too high, it is time to find a new credit card.

The Credit Limit.  The credit limit tells you the total amount of credit that you have.  Know what’s best for you.  A low credit limit may be good for you if you are undisciplined in your spending and need to be reined in.  This can have an advantage of keeping your credit card debt low.  A high credit limit is good for your credit rating if you do what you are supposed to do and always keep the balance under a third of your total available credit.

Fees for Credit Insurance.  In addition to the credit card, companies also try to sell you insurance for a lost card, or insurance for disability, or insurance to pay your balance in the event of your death.  Most of the time insurance isn’t necessary, but if you are interested be sure you know what it will cost.

In addition to the items appearing in the Schumer box required with the credit card offers, you may have other interests in a credit card.  If you have good credit you may qualify for accredit card rewards card.  Credit card rewards can include credit card cash rebates on purchases, credit card online account access, frequent flyer miles, additional warranty coverage, car rental insurance, travel discounts, concierge services and more.

It always makes sense to pay attention to the details of the credit cards you apply for.  Always read the fine print and shop and compare for the best credit card.

Tags: best credit card, credit card, credit card apr, credit card balance, credit card cash, credit card companies, credit card debt, credit card interest, credit card offers, credit card online, credit card rewards, credit cards, new credit card

This entry was posted on Wednesday, March 4th, 2009 at 6:27 am and is filed under Credit Card Articles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.