Finding A Credit Card That Works For You

Barely a day goes by without getting an offer to apply for a credit card, either by the traditional mail service or online.  If this is something you are considering doing, there are several key issues that you will need to understand before you decide what card offer is right for you.  All card offers will offer benefits.  Finding the one that fits your needs is the key.  Let's discuss a few of the things you should be aware of before you do any applying.

What Do You Need The Card For?

This is the first and most important question you should ask yourself.  Your answer will help to decide just what type of card and what incentives will work best for your needs.

For example, if it is for business use, look for a card that offers a cash-back for business purchases or membership to a discount buying club.  Most companies will offer a low introductory rate for a specified amount of time but you need to know what it jumps to when that said time has expired.  It may work best for your business if you find a long-term, more moderate interest rate than be stuck changing cards every few months to keep your interest in check.

If the card is for personal use, decide why and for what do you really need it for.  If you plan on using it instead of cash and checks throughout the month but plan to pay it off each month, know what the card's grace period is and what happens if you miss it.  Pick a card that offers reward points even if you don't carry a monthly balance.  This can be a great way to rack up the frequent flyer miles as long as you're disciplined enough to use it this way.

Know The Interest Rate

Many card companies will offer an initial interest rate that is quite low, sometimes even 0%, for a designated period of time.  This rate usually applies to both transferred balances and new purchases.  What you need to know is what happens after the introductory phase has ended.  Will the interest then skyrocket?  Will the interest rate be more moderate as long as you have a good payment history?  Look for hidden costs such as an annual fee or a cash advance fee.  These are important to know if you plan on using your card effectively.

Incentives

Many cards also offer a whole list of incentives with their application request. Although many of these are nice, usually you have to use your card a great deal to get them.  This can become a kind of trap.  You know, buy more to save more.  If you're going to use your card anyway, then you might as well have something to show for it.  Look for cards that offer incentives that interest you and you would actually use.