A Basic Guide to Choosing a Good Credit Card

Here the editors of MoneyChoice.org have put together a basic guide to credit cards and the process of choosing one that best fits your needs.

What are credit cards?

A credit card is a type of card that is given to users to use as a form of payment. Usually, the card is made from plastic; however, there are cards that are made from titanium and other more expensive material. The cardholder is able to pay for items and other services with this card, and in return, he or she agrees to pay for the items charged to the card. The credit card is given by an issuer, and the issuer gives the cardholder a credit limit. The credit card’s limit will be the maximum amount that the cardholder can charge. If the limit is exceeded, the cardholder may have to pay penalty fees, or the credit card account could be closed. A credit card’s account is considered a revolving account, and a revolving account is an account that does not have to be paid in full each month; however, the cardholder will have to submit a minimum payment that is determined by the issuer. In addition to the minimum payment, the revolving account is also subject to interest fees. If the balance is not paid in full each month, then the interest fees will be added to the credit card.

Also see: Best Credit Repair Services.

What types of credit cards are there?

Basically, there are five types of credit cards available to consumers. Those five types of credit cards are Visa credit cards, MasterCard credit cards, American Express credit cards, Discover credit cards, and retail credit cards. Visa is probably the most well-known credit card issuer. There are many different companies that issue Visa credit cards. For example, people may have a Citi credit card or Chase credit card; however, the card will still have the Visa logo embedded on it. MasterCard credit cards and Discover credit cards are similar to Visa, but they are not accepted at as many places as Visa is. American Express usually offers the best credit cards. Most people will need an excellent credit score to qualify to receive a credit card from American Express. Many business owners rely on some type of American Express small business credit card to help with their expenses. Finally, retail credit cards are credit cards issued by certain department stores. These credit cards can only be used in that particular store; however, some stores allow people to upgrade their retail credit cards to Visa or MasterCard. If the card is upgraded, then the retail credit card can be used at any place that accepts that specific type of credit card.

How to find the best credit card offers?

The best way to find the best credit card offers is to compare the credit cards online. Because each credit card will offer a specific type of benefit, the cardholder will have to determine which benefits will work best for his or her needs. For example, some credit cards may have offers that allow cash back, and others may have offers that will give the cardholder bonus airline miles. It is also important to compare credit card rates when looking for the best offers. Some credit cards may offer a 0% interest rate for a predetermined introductory period, but then the interest rate may skyrocket to 29.99% once the interest period is over. When looking for the best credit card offers, it is also important to note the amount of the minimum payment each month. In addition to the interest rate, other fees are used to determine the minimum payment, and every card will have different fees. The cardholder will need to be sure to read all fine print before applying for a specific credit card. Finally, the cardholder should determine how much available credit he or she may need. If a person has a high credit limit, the benefits offered will be more enticing than someone who has a low credit limit.

How to compare credit cards?

When people desire to get the best credit card, it is important for them to compare credit cards. There are several things that people should take into consideration when they begin to compare these cards. First, it is important for them to determine the type of credit card they want. For instance, they may be looking for a balance transfer card or a rewards card. Going to different websites will allow them to get a side-by-side view of the different cards. It is important for people to keep in mind that all credit cards will be different. Student credit cards may not contain the rewards that a business credit card will contain. However, this does not mean that the credit cards for students are not good credit cards, but it does mean that they will offer benefits that will pertain to someone who is in college or just finishing college. Another important detail to note in a credit card comparison is if the card is secured or prepaid. Secured credit cards and prepaid credit cards are used for people with bad credit. If people decide to get one of these cards, they can compare the amount of the deposit that will be required for the different cards.

How to find low-interest credit cards?

Contrary to what many people may think, there are lots of low-interest credit cards on the market today. Although people may think that a high credit score is needed to get a low-interest card, there are many low-interest cards available for people with fair or bad credit. These cards may have a low-interest rate, but they will not have a huge spending limit. In order to find these cards, there are important steps that people will need to take. First, people must check their credit rating. After this step is completed, they will know what credit card they are likely to be approved to get. The second step will be to check different websites to search for low-interest cards. Since the person will already have an idea of his or her credit worthiness, then he or she will be able to search for the card that fits his or her credit rating. When the card is found, it is important to evaluate the interest rate after the introductory period. Since the interest rate after the introductory period will determine how much the person will eventually be paying, it is important to pay close attention to this number.

How to find the best rewards credit cards?

In order to find the best rewards credit cards, people should first determine what they are hoping to earn from using the card. For business people or other people who have to take a lot of flights, it is important for them to choose a card that offers frequent flyer points. These points can be redeemed to upgrade from economy class to business class, or they can be used for special discounts on hotels or meals. For people who do not do a lot of flying but use their cards frequently, they may benefit from a card that offers daily rewards. For example, the Chase Freedom credit card is regarded by many as the best credit card. This card offers quarterly rewards on different categories. These categories may include gas, restaurants, or groceries. Since many people will purchase items from these categories, the card is rated as having some of the best rewards. Another one of the top credit cards is the Blue Cash credit card from American Express. This credit card offers 6% cash back on certain purchases after certain conditions have been met; furthermore, it allows 1% cash back on all other purchases.

How to apply for a credit card online?

Being able to apply for a credit card online makes the process a lot faster and easier for anyone who chooses to do so. Since there is no need to mail in any credit card applications, a person can get instant approval. Furthermore, in many cases, a person may be able to begin shopping before the credit card is mailed to his or her residence. In order to apply for a credit card online, people should first compare the different credit card companies, and then they should look for instant approval credit cards. After they have determined what credit card they would like to apply to get, they will need important information with them. This information includes their social security number, their current and previous addresses, their employment, and their salary. After the credit card application has been completed, the person should make sure to read all the terms and conditions of the card. Once the terms and conditions have been read and the application has been reviewed, the person can submit the application. If the person is approved, he or she will know instantly. In some cases, the results may have to be mailed to the residence.