If you are thinking about taking out a credit card, it is highly important that you don’t jump in for the first one that you are offered, and instead search the market before deciding. The best place to look for the various benefits and conditions of each credit card choice is online, here you can find sites that will search for credit card benefits for you, for example, you can compare credit cards in Canada online, to see which suits you and your needs best.
Before you get to searching for the best credit card for you, however, there are some things which you need to think and consider first.
What Are Your Spending Habits?
Your spending habits and how you plan to use the card are very important when selecting a credit card. Think about whether you are the type of person who will pay the balance every month, use it solely in emergencies or whether you plan to make a big purchase and pay it off slowly. If you plan to pay the bill every month then interest will make no difference to you, and you should look for a card with no annual fee. If you plan on carrying the balance then you need a low-interest rate and if it is only for emergencies, you should be thinking about a low-interest card with no annual fee.
Credit Limit
The credit limit which you will be offered will depend on how much of a risk you are considered to be. If this is your very first credit agreement, it is likely that the credit limit will be low. If, however you have had well-managed credit in the past, you could be offered a sizable limit, and you need to think carefully and honestly about how much of that you really need. A high credit limit can be good for a large transaction, but if not, it can be tempting to spend beyond your means.
Interest Rate
Within the interest rate of a card, you can opt for one which charges APR, or an annual percentage rate, this will be a flat rate for the entire year. Alternatively, you could choose a credit card with a variable rate, that will fluctuate in line with the prime rate of a financial institution. In short, a card with an APR offers a fixed rate, and the variable rate will alter the interest charges month by month, so take a look and think carefully which suits you best.
Incentives and Rewards
This aspect of a credit card could be a make or break in terms of which you decide, upon the type of benefits that it offers. Almost all credit cards offer some kind of incentive scheme or rewards system that could see you get free products, huge discounts, collect points to be used for purchases on airlines, hotels or even on groceries and utility bills. The number of bonuses are widely varied so you should select a card that offers benefits that will suit your lifestyle.
Once you have considered these points and looked into the Ts and Cs, it is time to go and get your very first credit card. But always remember to think carefully and consider all your choices before deciding on which one you should go for.
