How To Choose A Credit Card?

Many credit cards are available these days, one has to choose a credit card according to his or her need. Credit card varies in features and offer different packages like no annual fee credit card, reward or rebate packages, low APR credit cards, gold and platinum card and so many others are in list. It becomes difficult when it come to choose one best for you out of so many choices. Here are some tips to find out best credit card offer.

1.) Applicant’s Credit History

Credit history plays an important role in getting a suitable credit card offer. If you have good credit history, you may be asked to choose as you required. But if you are not good in credit or have no credit or your credit history is poor than be careful in selecting one.

• Good to Excellent Credit

A good or excellent credit history means you can get the Platinum or Titanium card. Having these cards mean you can avail more benefits like lower APR and higher credit limit. Those whose credit is regarded as good can avail Classic or Gold credit card.

• Poor Credit or No Credit

A poor and no credit status can also be offered for a credit card but these cards will be available on higher interest rate and with some extra charges if we compare them with other standard credit card that are available in market. Two types of card are available for such people.

• • Secured Cards

These credit cards are available on some security deposit. It ranges from $150 to $350. You can only have credit limit up to the amount you have deposited.

• • Unsecured Cards

These credit cards don’t require any security deposit. These are mostly awarded to the people with good or excellent credit.

• • Prepaid debit cards

Those who have bad or no credit can avail prepaid debit cards. They don’t need any security deposit instead you can utilize them by paying for them in advance. They can be utilized same as other credit cards. These prepaid do not help you in building your credit history.

2.) How Much You Want to Spend?

When deciding for a credit card, first analyze your way of use. It mean how much you want to use your card or what things you want to purchase. Also consider how you pay off the credit card, either you want to pay off at the end of the month or want to carry the balance.

You should consider 0% APR credit card or low interest credit card if you want to carry your balance. You can save a lot of money by choosing low interest rate card.

If you want to pay you credit card bill at end of each month and want to use it more frequently than reward credit cards are the best option for you. Although reward credit cards are available on high interest rate. You can avoid this higher interest rate by paying the credit card bill on time. This not only save your money but also provide you some extra bonuses on purchases.

3.) Special Package For Special Need

Many financial institutes designs specific cards or offer feature keeping in mind there customers. It mean if you go for shopping to a specific mall or brand your credit card issuer may award you special incentive for using their credit card. These cards are mostly offered to frequent travelers, businessmen and to the individual who shop more frequently.

How to Lower the Credit Card Interest Rates?

Credit card interest rates are the price that you pay for your credit card balance. These interest rates are shown as APR (annual percentage rate). The credit card issuer gives you a grace period after your credit card purchase to pay off the full balance without getting interest charges.

The grace period consists of 20-30 days normally. If you fail to pay off the balance before the end of the grace period then you’ll get a finance charge on it. This finance charge is calculated by multiplying the interest rate with your balance. The resulting amount that is called the finance charge is added to your main balance and then you have to pay it. Interest rate and finance charge are directly proportional to each other such if you have high interest rates on your credit card balance then the finance charge will be higher too.

Reasons That Increase Credit Card Interest Rate

Your credit card interest can increase anytime even if you start with lower interest rates then there is no guarantee when it increases. There are several reasons that cause increase in credit card interest rates are: if you pay your payment late or after the determined limit then this will lead you to higher interest rates. Your creditor will increase the interest rates by applying the default interest rate on your balance. This nasty plenty can charge you more than 28%. Besides this various credit card agreements contain a universal default clause according to which your creditor can increase the interest at any time. The reason for this sudden increase in credit card interest could be any.

Your creditor informs you about the increase in interest rate before 15 days of this implementation. In this case you have two options, either you close your credit card or continue to pay the balance at lower interest rates. If you choose the second option then inform your creditor in black white before the end of the 15 days.

Credit cards such as department store or gas credit card scores contain higher interest rates. It is wise to pay off balances on such cards to avoid high finance charges. If you want to keep you credit card interest rates low then maintain a good credit score. This is because credit score is inversely proportional to the interest rates such as higher credit score will lead to lower credit card interest rates.

How to Get Lower Interest Rates?

To get lower interest rates the best suitable option is “ask your creditor”. But before asking your creditor, make sure that you have paid off your balance on time and haven’t exceeded from the paying off limit. This step will lead you to the lower credit card interest rates. Contact your creditor and ask him that you want lower credit card interest rates. Don’t forget to tell them that you’ve been receiving lower credit card interest rates offers and you could use these offers if your rates are not lowered by the current creditor. Use a polite way and be determined.