Credit Cards

Credit Cards: Which Credit Card is Right for You?

If you're in the market for a new credit card, there is a bewildering array of cards to choose from. There are even more incentive offers, so how can you decide on the card that is best for you? Here are some of the factors to consider.

What Kind Of Payer Are You?

The most crucial question is whether you are a person who clears the credit card every month or whether you always leave a balance on the credit card.

If you pay up at the end of every month, then you can go for a credit card that offers an incentive. If not, then you need to look at the annual percentage rate (APR) on the card. If you know what your typical credit card balance is, look at the illustrations given by card issuers to give a guide to how much you might have to repay over time.

Taking An Interest

Even with interest rates, you need to be careful. Although your new credit card may come with a 0% balance transfer rate, this is not the only rate to think about. Look at the rate on purchases or other transactions to see what you might be paying. And remember that any payments you make are likely to pay off the transferred balance first, while any new spending accrues interest.

Hand in hand with the interest rate goes the interest-free period. This is the delay between spending money on the credit card and being charged interest. This can vary considerably depending on the card you choose. The interest free period can be as much as 56 days. And it's how you use it that counts. If you put major spending on the credit card after the statement date, you have a month till the next statement, and then a few weeks to make the payment. This can be a good way of managing cash flow.

Look At The Fees

There are three types of fees that count with credit cards. The first is the cash withdrawal fee. Many credit card issuers charge you for withdrawing cash at an ATM. These fees can be around 2% of the transaction. The percentage is even higher when withdrawing cash abroad. If you must use the credit card, then you're better off making one large withdrawal so you don't pay the minimum fee each time.

Getting Some Cash Back

Some credit cards offer annual cashback deals which are great for people who clear their balance every month, but not so good for others. If you don't clear your balance, the interest charged will wipe out any cashback gains. There are also reward points schemes that allow cardholders to earn money from their spending – and spend it again with a variety of high street and online retailers.

Paying attention to these items will help you to choose a credit card that will match your financial situation.

Reader comments about this article     By Yvette I am a single parent on a pension and child support. I keep getting knocked back by the banks, when all I want is something for emergencies only. I have never had bad credit, and it is only since my situation has changed that I can no longer get a card.     By paula trying to get a credit card but always get declined im currently not employed but looking for a job but i get paid $550 a fortnight,need help     By Mel I have a default paid from 4 years ago and I was recently able to get two car loans joint with my partner but unable to get a credit card. With monthly salary payment and young children a credit card is needed desperatly.     By Jon Menzel I applied for a credit card some months ago but kept getting declined. i only want one with a low limit for emergencies. i dont have any defaults why do i keep getting knocked back     By Christine Gibson Piece of mind..     By mae me and my partner have a stable income. my partner has a full time job and i work part time and still recieving centrelink income because we have children. we would like to apply for a credit card or even aplly for a car loan but we dont know who can help us. we poor credit rating and some unpaid defaults under our name. we havent tried any bank because we know that they would just reject us, and the more get rejected the less you will get approved. if anyone knows how we can obtained a car loan or a credit please email us. we just need a second chance just like other people out there. thank you     By Sean Davis Hi I work full time and have three paid defaults from five years ago. I would like to apply for a credit card but keep getting declined. How can resolve this.     By francoise lowe I am a single parent pensioner and fulltime student and have never had bad credit but cant seem to get credit as i am not employed.     By Manny Mara I have one default from 4 years ago.Even if is paid they still refuse to help.I need to borrow $25000 so i can clear my debds and get on with my life.I can afford to pay $200 a week.Can anyone help me please contact me on 0413872898.Please this is a genuine call 4 help.     By Margaret HORI Hi as a mum I have had a good credit rating however because my son did not pay his bills and I as the guarantor have now a bad credit rating     By KARA TUNNICLIFFE I HAVE NO DEFULTS LISTED AND HAVE APPLIED FOR 2 CREDIT CARDS AND HAVE BEEN DECLINED. OBVIOUSLY MY CREDIT RATING IS BAD, IS THERE ANY CREDIT CARDS THAT WILL APPROVE ME.     By teresa would like a credit card but not employed and have bad credit     By Muhammod Hi, My credit report was clean by 28th of August. This months i applied four credit cards but all declined. is that anyway i can get credit card? Thanks, Muhammod     By glen cubitt peace of mind     By Robin Moloi I have started freelancing and i need a credit card to buy services and material on the internet. - Please add your own comments below View All Name: Email: (your email address will not be published for public view) Comments : Please note: All comments are reviewed by our editorial staff before they will appear on this page. Please type the security code shown above in the space below (letters are case-sensitive.

back to top of page Disclaimer: The information contained above has been provided as a general service. Any references to specific financial, legal, accounting, or taxation issues are done so in the context of general information and should not be relied upon as fact or construed as advice by the us in any of these areas. You should consult a relevant financial, legal, tax or accounting professional to assist in your particular circumstance. About The Author: Joe Kenny writes for the UK personal finance sites http://www.ukpersonalloanstore.co.uk and also for http://www.cardguide.co.uk.