How to Choose the Best Credit Card

By in Guest Post | 10 comments

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:

BALANCE TRANSFER

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.

PREMIUM CARD

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

    10 Comments

  1. No matter what type of card you choose, credit cards are a bad deal if you keep a balance. Pay it off in full and enjoy the benefits!

    Moneycone

    August 21, 2011

  2. My main card is an airline rewards card where I earn frequent flier miles. I pay my entire balance each month so the miles I earn are a real bonus. I use them for overseas travel and earned at least 10 tickets flying business or first class.

    krantcents

    August 22, 2011

  3. Rather than a rewards card (I do plan on getting a captial one card in the near future) I prefer my no-fee cash back card. I get 2% back on everything, and 5% on groceries and gasoline. Since I basically put everything on there (why not) it is also a very easy way to track my spending. It has a high interest rate at 19.99%, but since I have never paid any interest, and never intend to, I’m not too worried about that. Sometimes I feel guilty that I get to enjoy all these rewards for nothing while there are people out there drowning in credit card debt that basically fund my cash back.

    My University Money

    August 22, 2011

  4. @Moneycone-Well put. Don’t buy if you can’t pay it off in full every month.
    @Robert,@Krantcents- 2 more votes for rewards! And a reminder to pay off the balance in full each month.
    @My University Money-Awesome card. Which card pays 2% cash back per month with no fee. That’s a great deal.

    Barb

    August 22, 2011

  5. I definitely enjoy my reward card now much more than when I was only able to make minimum payments. Load up on a card that gives you back something that you want, i.e. more travel or just play old cash back.

    1step

    August 22, 2011

  6. To be absolutely honest with you, my preferred kind of credit card is the kind that I just cut up and threw away.

    I don’t have any open credit cards at this time, as they’re all closed due to my enrollment in a debt management program.

    If I had an open one, I lack the self-discipline to do anything but max it out.

    I realize that they are useful tools when used correctly – and maybe one day this will change – but right now, they’re nothing but trouble for me, and you won’t see one in my wallet.

    I do, however, applaud those that use them wisely.

    Travis @DebtChronicles

    August 22, 2011

  7. @1st step; No debt = way less stress!!! That way you can enjoy the rewards without freaking out about the debt.
    @Travis-There is no one right answer for all. Good job knowing your own style and limits. You are a model for others.

    Barb

    August 23, 2011

  8. I tend to agree with Travis. I’m not a fan of credit cards. I do like the Kohls department store card though, because you can pay it off at the register when you buy something. That lets you stick to a cash system and take advantage of discounts they offer when you use your card.

    Matt Wegner @ Financial Excellence Blog

    August 24, 2011

  9. @Donna, It’s great to get cash back and also quite important to pay off the balance in full every month.

    Barb

    September 27, 2012

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