Shopping for The Best Credit Card Deals
Credit card users have different spending and payment habits. You might pay off your credit card bill completely every month, or you may just pay the minimum payment due every month, keeping a small, manageable amount outstanding on your card. You may be one of the millions of people who keep their credit cards at or near the maximum amount allowed. Regardless of which one of the payment profiles above best describes you, there are hundred of different credit cards to choose from that are designed to offer the best value for any one of these patterns. If you take the time to match the proper credit card with your payment and spending patterns you can save a great deal of money. If you don’t, you stand to pay hundreds or even thousands of dollars of needless interest or fees.
Credit cards are big business today. Credit card vendors offer a huge array of incentives to lure your business. Four of the most common of these are cash back rewards, award point good for travel services and merchandise, 0% balance transfers and low interest on outstanding balances. Some even offer you the ability to custom design the picture on the card! Hundreds of thousands of consumers are spammed weekly by credit card offers either in email or regular mail, and if you’ve chosen a credit card product from that selection you have almost certainly not chosen the best one available for your particular spending habits.
Whether you are interested in a credit card or not, when you get an offer in the mail check out the Truth in Lending Disclosure. Every credit offer contains one – it is required by law – but they can sometimes be a challenge to find in all of the marketing drivel included in the offer. Make a game out of reading the disclosure before discarding – it’s fun! Pay particular attention to the interest rate that they’re offering – it’s usually high, and isn’t even close to the best deal that you can get if you actively shop for credit cards. As a matter of fact, some of the interest rates are downright predatory! Whatever the interest rate is, find it, have a look at it, have a laugh and then throw it away. The best place to shop for real credit card deals is online. You can compare products head-to-head there, and it’s convenient.
The facts are that, given the four basic categories of rewards (low interest, cash back, award points, zero percent balance transfer), most credit card offers focus on one of these areas and either do not excel at the others or, again, are downright predatory. Here are a few guidelines for choosing the right credit card for your spending and payment habits:
1) If you pay off the complete balance of your credit card every month, you don’t need to pay too much attention to the interest rate of the credit card, but “Not too much” does not mean “No Attention“! Do pay attention “grace period” associated with purchases on your credit card – the period of time between when you make a purchase and when interest begins to accrue. A longer grace period is better. Choose a credit card that offers rewards, or if you have a balance on another credit card that is charging you interest, pick a card that won’t charge interest on balances transferred.
2) If you keep a modest balance on your credit card (somewhere between 0% and 40% of the maximum amount of credit allowed) then you should keep a keen eye on the interest rate charged on that outstanding balance, but you may also want to look for a credit card that offers cash rewards for its use. This usage pattern is most common, and is actually the credit card usage pattern that favors your ability to build good credit; it shows creditors that you are capable of managing your balance and also makes you an attractive customer because you maintain a positive balance.
3) If your credit card balance is constantly at or near the maximum that you are allowed, then the interest rate that you pay is everything. Do not rely upon credit card marketing material found in email, regular mail or mall kiosks to provide you with the best deal – you need to actively shop for the best interest rate that you can find to control the amount of money that you pay in interest on your balance.
4) Be sure to pay your bills on time. This is important regardless of your history or credit balance. Also, always pay the minimum due at the very least. Credit card vendors often raise the interest rate on your credit cards if you pay too little or too late – they can do this without telling you, and late payment on one card can affect the interest rates on all of your other cards. Be sure to read your credit card statement carefully every single month. Pay special attention to the interest rate that they’re charging you. If it goes up, it might be time to move your credit account to a different credit vendor.
The more you are informed as a consumer, the better your chances are to save some real money; this is true in all business and particularly true with credit cards. The amount of money that you can save by shopping for the right credit solution depends upon your spending habits and your payment schedule, but it can amount to hundreds or thousands of dollars per year. Be credit wise: adopt a habit of reviewing the credit cards in your wallet or purse once or twice a year, and always be on the lookout, shopping for better offers. Chances are that if you’re using a credit card that you’ve had for over a year or two, you can save money – there are better deals out there.
Filed under: Business