Wednesday, October 30, 2013
Choosing the Right Credit Card for You
Credit Cards are a fixture in today's life. People from all walks of life use them for almost any and every financial transaction, from paying monthly bills to purchasing items off the shelf at groceries and convenience stores. No matter where a person goes these days, excepting perhaps for the absolute remotest corners of the earth, credit cards have become as acceptable as money, more so in some circumstances, because in foreign countries a credit card takes care of the usual bother of having a lot of travel funds converted into local currency.But with so many different credit card providers out there, and each with their own sets of package deals that offer different credit card rates and advantages, how do you go about choosing one that suits your personal needs? Here are a few simple things to keep in mind when selecting a credit card that will give you the best rates for your lifestyle.Look at the TYPE of card you'll need. While it may seem like a credit card is a credit card, in reality there are many different types of cards available, just as in a bank there are many different types of accounts, each offering different features. Some of the more common types to choose from are as follows:Student Credit Cards - As the name implies, these credit cards are designed to cater to the needs of students. Since students generally operate with limited personal funding, the credit ceilings offered by these cards is set to keep purchases made by students within a reasonable level. Also, the interest rates are set to lower levels, again because of the assumption that the people who use these cards wont have as much financial capability. They will generally be working part-time at best, so the rates these cards offer tend towards the reasonable. The biggest drawback to a student credit card is the credit ceiling; this, however, isn't such a drawback when you consider that the lower ceiling also allows the users to preserve their credit standing and not jeopardize themselves with overspending. If applying for a student credit card, look for ones with reasonable interest rates balanced with a credit limit that will keep expenses within the budget.Business Credit Cards - These cards are tailored to be used by people running a business. The main purpose of these cards is to be utilized in place of a business owner using his/her own personal credit card to help pay for the overhead costs of his/her business. Business credit cards generally have larger credit ceilings than regular credit cards due to the expected expenditures involved in operating a business. The rates for these cards, and the corresponding credit ceilings, are usually based on the financial status of the business entity for which the card is meant. When looking at these cards, keep in mind the projected fiscal ability of your business. Get a business credit card that can cover your overhead costs, and make sure that the interest rates are also at a level that your projected income can cover.Zero-interest Credit Cards - these are credit cards that have 0% interest initially. The name does not mean that the card permanently does not incur interest; rather, these cards have an introductory period, usually stretching between 6 months to a year, where no interest is incurred. Regular rates are applied after the period is over, however, so it's a good idea to look at the interest rates and available credit ceiling after the initial introductory period expires.Low Interest Credit Cards - these credit cards generally have a lower interest rate than others; unlike zero-interest cards, which offer no interest rates for an introductory period then switch to regular rates afterwards, low interest credit cards maintain a lower interest rate on credits incurred throughout the lifetime of the card. In the case of these cards, look at other factors when choosing one; there may be annual fees involved in maintaining the card, or lower credit limits, for example. Look into these when deciding on a low interest card to apply for.Reward System Cards - these are credit cards which possess additional perks for usage. There are many types, including credit cards that offer airline mileage points, hotel credit rewards, gasoline points, and even cash reward credit cards. When looking at one of these credit cards, the interest rates of the card should of course be taken into consideration, but the main point is to see if the interest rates are offset by the rewards offered. AS long as the rewards suit your lifestyle, these cards make for a good option.These are just a few simple tips covering the different types of credit cards available on the market. When choosing a credit card, finding the best credit rate isn't just a matter of looking for low interest cards; find one that suits your lifestyle and needs, and the rest follows.