Nowadays, having a credit card is not a luxury but a necessity. Different banks offer credit cards on different conditions and with different kinds of benefits available to the cardholder. However, in order to get a credit card with potential benefits, you need to have a good borrowing history or prove to the bank you are financially reliable otherwise. At the same time, you need to carefully consider all pros and cons of each variant and choose what best fits your needs. So, how to choose the right credit card that will be the most suitable for you? Here are several things to consider:
- Grace period
Different banks offer credit cards with different grace periods. It may be from 50 to 100 days or more – even up to one year. During this time frame, no interest is charged on the money spent. After the defined grace period, an interest is charged on the credit money. Thus, the longer the grace period the better. Still, redeeming debts over a short period of time is beneficial to you as a cardholder. Clients with good borrowing history receive many bonuses and changed lower interest rate over time.
- Annual fee
Most credit cards require the owner to pay an annual fee. Some banks change annual fee only if the card was used during the year. Other banks require a card owner to pay the annual fee regardless of whether the card was used or not. Therefore, consider this option carefully, especially if you need a credit card “just in case.” If you think annual fee is too much to pay, there are numerous credit card issuers who offer free of charge credit cards to expand the client base. However, as a rule, cards with annual fee charge are more convenient and reliable.
- Interest rate
Surely, one of the most important criteria to consider is credit card’s interest rate. There may be fixed or variable interest rate. Variable interest rate can change together with the change of an index rate. Fixed rates are fixed and change only under certain circumstances. Also, the interest rate may vary depending on the paying capacity of an individual as well as for how long he or she has been a bank’s client.
Some credit card issuers offer a good bonus right after you apply for getting the card. This bonus may either cover the annual fee charge or just serve as a motivation to apply for a particular card.
Overall, it is more than possible to choose a suitable credit card depending on what you plan to do with it. Low-interest credit cards with a grace period of one year or more are perfect for big purchases or paying off debts. Such cards are great in helping you cover the debts or just giving room for solving financial problems.