In order to save money, you must shop around for the credit card that is right for you. All credit cards are not created equally. Even when you have a high FICO® score, terms and conditions can vary from card to card. Always try to seek out the card that works best for you.
If you travel a lot a card that offers free miles with each purchase might be right for you. Do you shop at any specific store frequently? Then maybe a store credit card will be right for you as you typically can save between 10 and 30 percent between instant discounts and coupons associated with that store's credit card. Some credit cards have annual fees while others do not. There are many things to consider and because all circumstances will not be the same, take your time and write down your needs before you start your search.
Here are the three primary factors you want to consider when selecting a credit card:
- Interest Rate: The rate you will pay if you carry over a balance, take out a cash advance, or transfer a balance from another card.
- Grace Period: The number of days you have to pay your bill in full without triggering finance charges.
- Annual Fee: The set amount you will pay every year the card is active, despite whether or not you make any purchases.
Some other questions you should consider before selecting a card include:
- Do you understand all the features of a credit card?
- Have you compared features and costs from one card to another?
- Do you know your rights when using that card?
- How do you resolve an issue or dispute with that card?
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Credit Card Features and Benefits
Many credit card companies offer all sorts of incentives to get your business. Some of these features and benefits may include:
- Rebates (money back) on the purchases you make
- Frequent flier miles
- Phone-call minutes
- Additional warranty coverage for the items you purchase
- Car rental insurance
- Travel accident insurance or travel-related discounts
- Credit card registration (this helps if your wallet or purse is lost or stolen. You can call one credit card company to report that all your credit cards were lost or stolen.)
- Insurance to cover the payments on your credit card balance if you become unemployed, disabled or die.
- Insurance to cover the first $50 of charges if your card is lost or stolen. Under federal law, you are not responsible for charges over $50.
Remember that all credit cards are not the same. Features and benefits will vary from card to card. If you find that you don't need a certain feature or benefit, ask to have it removed from your account and instead get an interest rate discount or some other preferred feature or benefit.