Shopping For Credit Card Rates

How to Shop for the Best Credit Card

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Not all credit cards are right for all people. Shopping for the right credit card can save you a great amount of money on interest and other card-related fees. So before you apply for a new credit card, it's a good idea to do some research.

Take the time to find the best offer, and look for a credit card that fits your financial needs. When you are doing your research, focus on credit card features that best support your lifestyle and spending habits:

  • Visit websites of leading credit card issuers. Seeing what offers are out there is a good place to start.

  • Decide how much credit you need, based on your spending habits. Choose a credit limit on your card that best suits how much you are likely to spend every month. If you don't want a lot of revolving debt — where you have minimum payment amounts due every month — choose a card that allows you spending flexibility and enables you to pay off your bill and carry a zero balance.

  • Are you interested in rewards and point programs? Many credit card companies offer reward cards that accumulate points that you can redeem for products and services. For example, if you love to travel or must do so frequently for business, apply for a credit card with a frequent flyer rewards program. It could help you save on plane tickets and other travel-related incidentals. Some credit cards offer you "cash back" programs that reward you simply for using the credit card.

  • Is credit fraud protection included? In case the credit card is ever lost or stolen, it's best to go with a credit card that offers fraud protection.

And don't forget: If you have a higher credit score, you can generally negotiate a lower interest rate on credit cards. That's why it's always a good idea to check your credit score before applying for a card. If your score is above 700, you may qualify for a lower interest rate. If you have a low credit score or your credit is not well established, you may be turned down for a credit card or be required to get a secured credit card. A secured credit card requires a cash collateral deposit that becomes the credit line for the account. Almost every secured credit card charges an annual fee, and these fees vary, depending on your credit score.

When you choose a credit card, know your rights under the law.

One little-known fact — if your credit card is lost or stolen and then is used by someone you don't know without your permission, you do not have to pay more than $50 of those charges. The Federal Truth in Lending Act entitles you to "credit card insurance" on unauthorized amounts over $50.

Base your credit card choices on how you plan to pay your bills.

A "best credit card" is likely to vary for every person and often depends on a person's bill-paying habits. If you expect to pay your bill in full each month, you may be more interested in a card with low fees, since you won't accumulate finance charges.

If you think you'll carry a balance from month to month, a credit card with a lower interest rate, or Annual Percentage Rate (APR), may be a better choice. Think of it this way: A lower interest rate means that you pay lower finance charges each month.

It's also a good idea to see if your chosen credit card allows for a grace period. That's the number of days you have to pay your bill in full (from the statement date) without triggering a finance charge.

Last but not least, you should always be sure to check your credit report to be sure that you will qualify before applying for a new credit card. If you apply and are denied, the denial can lower your credit score and have a negative impact on your overall credit rating.

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