When it comes to obtaining a new credit card, you might not have as much choices as people who already have good credit. Nevertheless, you should still do some comparison shopping to ensure you are getting the best deal available to you. Charge card terms and interest rates vary – and some of these variations can make an enormous difference to your wallet. Always look for the card with the best interest rate and terms.
Here’s what you should search for in a credit card:
1. Avoid high interest rates. Credit card issuers disclose the interest rate in a number of ways, but you desire to look at the APR (APR). This is the quantity of interest, transaction fees, and other charges that you’ll pay per year, expressed as a percentage. It is the best indicator of the specific interest you will pay.
2. Avoid low introductory rates. Some cards have a low “introductory rate” (also called a “teaser rate”). After a few months, the interest rate will skyrocket. Also, sometimes the advertised rate only applies to certain people, such as for example those earning a higher income. feshop18 The card company charges a higher rate to those who don’t qualify – that could mean an unpleasant surprise when your first bill arrives.
3. Understand interest calculations. Many banks today charge interest based on the average daily balance. This is one way it works: Say you charge $1,500 on your charge card and pay $1,200 on the deadline. When your next bill arrives, a bank using the average daily balance will charge interest on the $1,500 average daily balance from the previous month, not on the $300 you still owe.
4. Review the grace period. This can be a interest-free period of time between your purchase date and the bill due date. It is usually available and then those who do not carry a balance. In the event that you pay your bill in full each month, ensure you have a grace period. Otherwise, you’ll pay interest from the date of your purchase. If you carry a balance, a grace period isn’t important.
5. Avoid high annual fees. Some credit card companies charge you a flat fee (as well as interest along with other charges) for using their card. Some do not. In the event that you pay off your balance each month, you want a card lacking any annual fee. If you carry a balance, a card with an annual fee but a low interest rate may be better than a card with no annual fee but a high interest rate.