How To Compare Credit Card Offers
Looking over a pile of credit card applications is enough to make your head spin, but choosing the right credit card doesn't have to be a stressful experience. A little time, patience and education about your finances can go a long way when deciding on the perfect credit card for you.
The first step in deciding on a credit card is knowing which offers you're most likely to be approved for based on your credit score. While lenders don't typically share the specifics on their approval requirements, most credit card offers do provide a credit score range as a general guideline. Lenders use your credit history to determine your creditworthiness, and applicants with higher scores are likely to receive the most favorable rates and terms. If you're not sure about your credit score, try Credit.com's free Credit Score Estimator to calculate your credit score — the estimator will then show you which credit card offers best fit your credit standing. Once you have a sense of where you stand, examine each credit card issuers' minimum credit score requirements to weed out applications that don't fit.
There are a variety of credit cards available, and some may be geared toward certain groups of people, such as students, high-income earners or individuals trying to establish credit for the first time. Know which types of credit card features you
are looking for when examining each application. Do you want a rewards card or cash back credit card? Are security features and easy accessibility important to you? Keep this in mind when reviewing card offerings.
If you choose a card for a specific reason, such as a low introductory balance transfer rate or a generous frequent flier miles program, make sure you understand any restrictions or special terms before signing up for the card. For example, how long does the intro period last? Do any black out dates or special circumstances apply? How do you go about redeeming your rewards?
Some of the most important considerations to keep in mind when examining credit card applications are the interest rates, fees and any other additional costs that accompany the card. Reading over the disclosure terms and conditions can be tedious, but it's necessary to ensure you fully understand your rights and responsibilities. Make sure you know the annual percentage rates for purchases and balance transfers, as well as whether they are fixed or variable. In addition to rates, make sure you know what types of fees are attached to each card. Issuers may charge fees for submitting your application, maintaining the card, being late with a payment or exceeding your limit. By comparing the fees that accompany each credit card against the APRs you may find that a high-rate card with few fees may not be more advantageous than a low-rate card with numerous fees.
Understanding how you handle your bills can help you make the best decision. For example, if you plan to pay your bill in full each month, choosing a credit card with a higher rate, but fewer associated costs, may be in your best financial interest. If you have trouble remembering when your grace period is up and your balance is due, choose a card with online features that send notifications, automatically deduct your monthly payment or allow you to manage your account online. The most important component in choosing a credit card is making sure the terms and conditions compliment your particular financial behavior and goals.
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