There are hundreds of banks and financial institutions in the United States which offer credit cards. However, choosing the best credit card is not as easy as buying a smart phone. There are various factors which should be considered while applying for a credit card. Let’s take a look at some of the most important points to be considered while selecting credit cards
Annual fee or membership fee
Membership fee or an annual fee is the fee which is charged by credit card companies once in every twelve months. It is advisable to clearly talk about this fee with your bank while applying for a credit card.
Last year, the better business bureau in the United States received millions of complaints from credit card customers highlighting that their credit card issuer did not disclose any information about the annual fee or membership fee when they applied for the card.
Annual percentage rate for cash and purchase
This is the most important factor to be considered while selecting a credit card. Annual percentage rate (APR) is the interest rate which is charged in case if the card holder makes minimum payment instead of paying the entire bill, and carries forward the remaining balance in next month’s credit card billing cycle.
The APR on cash transactions (ATM withdrawals) is always higher than APR on purchase transactions. It is advisable to clearly talk to your bank about APR for both, cash and purchase transactions.
Minimum payment amount
It is the amount which the credit card user has to pay in case if he or she is not willing to make payment for the full amount on his/ her credit card bill. This amount may vary from one credit card issuer to another.
Some of the most important charges are- late payment charge, over the limit charge and Forex charge.
Late payment charge is applicable in case if the card holder does not make the minimum payment on or before the bill due date. While over the limit charge is applicable if the balance on the card is more than the card’s credit limit.
Forex charge is applicable if you use your card while abroad. It is also charged in case if you make a transaction in foreign currency using a website which has its merchant account with bank which is outside the country where the credit card was issued.
Before applying for a card, you can read customers’ reviews by visiting various blogs and websites. It’s always better to go with the credit card company which offers prompt customer service and has minimum number of complaints in the better business bureau. There are many credit card comparison websites; you can easily find information about the interest rates and fees charged by various credit card companies.
By- Nitten Gokhaley
Nitten writes for several websites and a newspaper called Life 365. He writes on variety of topics like Health, Travel, Business, Hollywood, Gadgets, Life style, Automobile, Politics, Science, Sociology, Psychology and more.
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