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How To Choose A Credit Card

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How To Choose A Credit Card

Credit cards are extremely useful, but as we all know you need to take care when choosing and using a credit card. If you only use it sparingly, you should be fine. However, if you get into a habit of spending without thinking you will end up in debt with the stark possibility of being unable to pay it all back. Choosing the right credit card for you will make the world of difference when you start to use it. So what do you need to watch out for?

It is well known that some credit cards impose penalties for late payments on your account. If you are applying for a credit card we suggest that you setup a direct debit per month that always sends the minimum payment to the credit card. This will ensure that you are not caught out by a late payment penalty charge. Take care when setting this up as some of the credit card companies are very sticky about when the payment must arrive, right down to the hour. If this is the case, setup the direct debit to arrive the day before the due date - always take the side of caution.

If you do choose a rewards credit card based on frequent flier miles, take a close look at the fine print in the terms and conditions before you sign. Many of the frequent flier miles rewarded by credit card companies against purchases come with intricate rules and conditions. Many can only be used between certain dates, on certain routes and with certain companies. If you are basing your decision solely on the rewards, take a very close look at the terms and conditions before you go any further.

Cash advance offers are also very popular, but again you need to pay very close attention to the terms and conditions. Some of these cash advance credit cards come with very tight terms and conditions that impose strict rules on exactly how you obtain the cash advance, when you can use it and where it can be spent. Cash advance cards require you to pay a fee of up to 4% - so beware of what you may be getting into.