The Best Credit Card

To find the best credit card you will need to compare fees, charges, and benefits among various credit card issuers. When you’re choosing a credit card, it pays to shop around. Read the fine print on credit card offers. A low interest rate credit card could cost more than you expect per month due to excessive miscellaneous fees.

Types of Credit Card Accounts:

Charge Agreement - Pay the full balance each month, so there are no interest charges. Charge accounts and accounts with local businesses often require repayment on this basis.

Revolving Agreement - A consumer pays in full each month or chooses to make a partial payment based on the outstanding balance.

Revolving Agreement - A consumer pays in full each month or chooses to make a partial payment based on the outstanding balance.

Compare these Features in Credit Cards:

• Annual Percentage Rate (APR) - The APR is a measure of the cost of credit, expressed as a yearly interest rate. You will also want to check the “periodic rate”. That’s the rate the issuer applies to your outstanding balance to figure the finance charge for each billing period. If the card offers a very low introductory rate, find out what the rate will be after the initial period. Ask about other limitations on the initial rate. For example, is it only for balance transfers, and not regular purchases? Be aware that some companies have high penalty rates. Ask when the company may apply a penalty rate to your account. If you’re late paying your bill, your rate may increase significantly.
• Grace Period - This is the time between the date of a purchase and the date interest starts being charged on that purchase. If your card has a standard grace period, you have an opportunity to avoid finance charges by paying your current balance in full. Some issuers allow a grace period for new purchases even if you don’t pay your balance in full every month. If there is no grace period, the issuer imposes a finance charge from the date you use your card, or from the date each transaction is posted to your account.
• Annual Fees - Many credit card issuers charge an annual fee for granting you credit. Fees can range from $25 to $125 per year.
• Transaction Fees and Other Charges - Some issuers charge a fee if you use the card to get a cash advance, if you fail to make a payment on time, or if you exceed your credit limit. Some may charge a flat fee every month whether you use the card or not.
• Customer Service - Many issuers have 24-hour toll-free telephone numbers.