credit card offers

6 Ways to Tell If a Credit Card Offer Is a Good One

Annie Mueller — Tue, 10 Oct 2017 08:30:10 +0000

Credit cards can be a powerful tool for your finances if you use them wisely. In order to do that, though, you need to know exactly what you're getting into with each credit card. Here's what you should look for to determine if a credit card offer is good or not.

1. Look for the lowest interest rate

Saying "low interest rate" and "credit card" in the same sentence is almost paradoxical; credit cards are high-interest loans, which is why carrying a balance on them is such a bad idea. However, within the limited world of credit card interest rates, you want to go as low as possible.

Credit card interest rates can range from 13 percent all the way up to 22 percent. You'll want to consider two interest rates when you look at a credit card offer: the introductory interest rate, and the annual percentage rate that kicks in once that introductory period is over. (See also: The Best Low Interest Rate Credit Cards)

2. Consider the introductory interest rate

Sometimes it's worthwhile to take a card with a higher APR if it also provides a longer, lower introductory interest rate. It depends on how you plan to use the card. For instance, if you're going to make a big purchase on a card and pay it off within a few months, you might want to get the card with the 0 percent introductory interest rate for 15 months, even though its annual rate is higher than another offer.

The key here, of course, is to be sure you stick to your plan and pay off the balance before the introductory term is up. Be aware, too, of factors that could cause that introductory rate to go away sooner than expected; one missed or late payment, for instance, might cause the 0 percent interest rate to turn into that 19 percent interest rate you really want to avoid. (See also: 6 Things You Might Miss in Your Credit Card's Fine Print)

3. Look into the points and perks

Some people use credit cards to their advantage by accumulating reward points or other perks. If you're smart with your credit card use and pay off your balance monthly, that can be a good plan.

But it's only worth the trouble if the points or perks are things that have value for you in real life. If you travel frequently, for example, a credit card that gets you hotel room discounts and better airfare can be a great deal. Shop around for the best points-per-purchase ratio so you get the most return for your dollars spent. (See also: The Best Travel Reward Credit Cards)

And, of course, you'll need to be aware of any fine print that might keep you from accumulating those points or perks. For example, are there particular types of purchases that don't count for credit card rewards? If so, can you still use your credit card enough on other, valid purchases to accumulate the rewards you want?

4. Check out their protective policies

Identity theft is a very real issue, and you'll want to know that any credit card you use has good security measures in place to prevent it from happening. You should also look for a card that will protect you and your assets in the case of identity theft or fraudulent purchases. What are their terms for protecting your identity, and what action will they take if your card is lost, stolen, or used fraudulently? (See also: 14 Awesome Credit Card Perks You Didn't Know About)

Most legitimate credit card companies offer fraud protection, but don't assume that's so. Read the fine print to be sure that the card you're considering will cover any fraudulent charges. Will they require you to provide proof of any kind in order to receive reimbursement?

5. Check out all possible fees

Are there hidden fees for every possible scenario? It's standard for a credit card to come with fees for late or missed payments, of course. How much are these fees, and when are they assessed? Do the fees increase if you accumulate more than one? Are there unexpected ways in which you could end up accruing fees? There may be fees for particular types of transactions (such as cash advances or balance transfers). Look for a card offer that designates the fees it will assess and the amount for each one so you can be sure to avoid them. (See also: The Best Credit Cards With No Balance Transfer Fees)

6. Consider all potential use limits

How you plan to use the card is a big factor in which the credit card offer can benefit you the most. For example, if you want a credit card to use while traveling, you'll need to make sure the card is accepted at most places where you are going, and has no foreign transaction fees. If, on the other hand, you want a credit card for your child to use at college, you might prefer a card with a lower credit limit and a more forgiving interest rate. (See also: 4 Important Ways College Students Should Use Credit Cards)

Consider how you'll use the card and search for an offer that gives you the maximum benefits for the precise use you have in mind. Knowing how you'll use a credit card is key to using one wisely, and remember: In all cases, paying off the balance as quickly as possible is key to keeping more money in your pocket. (See also: 12 Travel Perks You Didn't Know Your Credit Card Had)

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This article is from Annie Mueller of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Questions to Ask Before Signing Up for a New Credit Card

Jason Steele — Tue, 18 Apr 2017 08:30:11 +0000

There's no shortage of attractive offers for new credit cards. The credit card industry is extremely competitive, and you are likely to come across advertising for new cards on television, in print, online, and even on airplanes. But as compelling as these offers can be, you still need to think carefully before applying. (See also: Pre-Approved for Credit Card Offers: What Does It Mean?)

Opening a new credit card account is an important financial decision, and you should consider these five things first.

1. Can you manage a new credit card account?

Before you even begin to consider which credit card to apply for, think about if you need a new credit card at all. If there's any chance that having a new credit card will entice you to overspend and incur debt, then it's best not to apply. (See also: The Fastest Way to Pay Off $10,000 in Credit Card Debt)

Keep in mind, too, that each new credit card you have will generate a new statement to review each month, and another bill to pay. If your new card is from a different issuer than your other cards, then you'll need to create a new online login and you might want to download a new mobile app. Having more cards than you can keep track of increases your chances of losing them or having one stolen.

2. Does this credit card meet your needs?

Just as there are dozens of different cars made for nearly any kind of use, there are hundreds of different credit cards designed to meet every conceivable need. If you tend to carry a balance on your credit cards, then you should be looking for a card with the lowest possible interest rate.

You could also look for a card with an interest-free promotional financing offer, to help you pay off your debt sooner. (See also: How to Pay Less Interest on Your Credit Card Debt)

If you always avoid interest charges by paying your entire statement balance in full, then you should be earning rewards for your spending in the form of points, miles, or cash back. (See also: Cash Back vs Travel Rewards: Pick the Right Credit Card for You)

3. What interest rates and fees will you have to pay?

Before you apply for a credit card, you should understand all of the costs of the card. Fortunately, credit card issuers are required to prominently disclose the important rates and fees in a standardized table. Any time you see a credit card application, you can look for a link to the "terms and conditions" or "rates and fees." There, you will find a list of fees including the annual fee, late fee, cash advance fee, balance transfer fee, and foreign transaction fees, if any. It will also show you the standard interest rate and any promotional rates for new purchases, balances transfers, and cash advances. (See also: Simple Guide to Evaluating a Credit Card With an Annual Fee)

4. Do you qualify for approval?

There's no point in applying for a credit card if you won't be approved. First, you need to look up your credit score. Most credit card issuers now offer free access to your credit score online, and there are several websites that can also provide you with a free credit score.

Next, you need to research the credit cards that you are applying for, and learn what kind of credit score is needed. For example, a credit card issuer's website may list each card according to the type of credit history needed, such as "Average" or "Good." In addition, many credit card issuers will have special cards designated for people who are rebuilding their credit. Finally, you can assume that the most competitive premium rewards credit cards will only be offered to applicants with excellent credit. (See also: How to Use Credit Cards to Improve Your Credit Score)

5. Is this the most competitive offer available?

It's easy to find credit card offers, but it can take some time to locate the most competitive offer for your needs. If you are looking for a card with the lowest interest rate, then you need to look at the terms and conditions of multiple cards to find the best offer. And if you are trying to earn rewards, then you need to estimate the value of the rewards you would receive from the card, based on your own personal spending habits. Finally, you also need to take into account the value of any cardholder benefits offered, and the cost of the annual fee and other fees. (See also: Credit Cards With the Best Sign Up Bonus Offers)

This article is from Jason Steele of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: