Since credit cards were first introduced to Britain in 1966 there has been massive change in how we as consumers use them, as well as the range of cards and benefits available. Introduced as a method of borrowing that allows you to lend without potentially have to pay interest, credit cards can now be used to shop abroad, to collect points that can be exchanged for rewards, or to donate to charity as we spend.
Since the recession started access to borrowing via credit cards has become far more restricted, with your credit rating being increasingly important in influencing the choice of credit cards available to you. It makes financial sense to select a credit card with the lowest possible interest rate for which you are able to qualify, particularly if you are not intending to pay off your full balance every month. If you are applying for a credit card and wondering what is most suitable for your needs there are a few other things you may want to consider:
If you intend to transfer a balance from another credit card in order to pay it off at a lower rate, you will of course be looking out for the lowest possible interest rate deal. If you can – choose card with a zero per cent rate for a fixed term. Be careful to check for fees associated with the balance transfer. These can vary significantly between cards and are often calculated as a percentage of the overall balance. To find the best rates available to you, research online; compare rates for credit cards at Money Expert.
PAY OFF BALANCE IN FULL
If you want to take out a credit card for spending purposes, interest rates may still be a factor, but less so if you can afford to pay off the balance in full each month. If this is the case you may want to consider a card that comes with benefits such as cash-back, reward points, or that makes a donation to charity on your behalf when you use it.
If you do choose to take out one of the many premium cards or charity cards that
are available to individuals who meet certain financial criterion, you usually benefit from a lower interest rate but may have to pay an annual fee in return for the extra features provided with such as cards. These can include benefits such as money off the price of a holiday, or free travel – making them a good choice for those who like to explore.
Barb’s comment; Pay off your bill every month and go for a low or no fee card with rewards! If you can’t pay the purchase in full, ask yourself if you really need to make the purchase! You will be wealthier in the long run.
What is your preferred type of credit card?
This post was in partnership with money expert