Credit Card ’s Talk

Some days it seems like my mail and inbox are full of offers to apply for a credit card, and I’m sure I’m not the only one. If you are thinking about using one of these offers to apply for a credit card, then it’s worth spending a bit of time thinking about a number of key issues before filling out the application form. The whole point of these offers is that the credit card company is offering you benefits if you get one of their cards. That sounds great, but does their card really suit your needs? Here are some things to consider before signing on the dotted line.

The first question you need to ask, and probably the most important, is - what do I need the card for? This is vital, because once you understand what you’re planning to use the card for, and how you plan to use it, you’ll have a much better idea what type of card will suit you best.

Many people nowadays get a personal credit card, make all their purchases throughout the month on their credit card, then once a month pay it off. This saves the hassle of having to issue checks, remember a pin number or carry lots of cash. Assuming you’re disciplined enough to do things this way, then when it comes to choosing a credit card, you’re best to find one with a good interest free or grace period. Make sure you know how many days the grace period lasts, and be very certain you’ve paid the credit off before the date. A card with a low interest rate probably isn’t that important for you, because if you handle your credit card properly, you shouldn’t need to pay interest. You might, however, also look for a good rewards program to go with your grace period.

Perhaps you’re looking at getting a credit card for business use. In that case, look for a card that offers membership to a discount buying club, or cash-back on business purchases. It may sound great to apply for a credit card with a low introductory rate, but make sure you understand how long the introductory period lasts, and what the interest rate will be after it finishes. You may be better off finding a card with an ongoing, more moderate interest rate, if your business credit card is likely to carry an ongoing balance.

Checking the interest rate is important when you’re reading any credit card offer. 0% for transferred balances sounds wonderful, but it usually is only for a fixed period. Read the fine print to make sure you know what happens down the track when all the offers run out. Unless you want to change credit cards every few months so you can skip from offer to offer, then you’re better off choosing a card whose normal conditions are appropriate for you.

Also, check for other fees and costs, such as an annual fee, or high charges on cash advances. Again, if you’re planning to use your card for cash advances regularly, you may need to shop around for a card with cheaper cash advance fees.

Incentives always sound good when you?re reading the credit card offer, but take some time to work out the numbers. Quite often you have to spend a ridiculously large amount of money to get some very small reward. If you are also paying more interest on that card than you could on another, it might even work out that you’re better off skipping the rewards program and getting the card with the cheaper rate. If all the other conditions of the card suit your spending habits, though, then it might be worth choosing a card with a rewards program. If you’re going to be spending that money anyway, you might as well get some benefits.

The trick with credit cards is to work out your usage patterns, then find the cheapest card to suit those patterns. Taking the time to do your research will pay off in the long run.

Timothy Gorman is a successful Webmaster and publisher of BestOnlineCreditCardOffers.com He provides more credit card facts, tips and advice on finding the best low interest credit card offer online, that you can research in your pajamas on his website.