Comparing credit card offers can feel like an apples to oranges comparison. They all seem so different. But here five areas they tend to have in common. Looking at these areas can make it easier to understand:
Look at the Sign Up Incentives
These days, many credit cards have sign up incentives.They come in different forms, but if you read through it carefully, it often boils down to some kind of cash back or gift card if you spend a certain amount in the first three months. If one credit card offers you $150 for spending $1000 in the first three months and another offers you $150 for spending $500, obviously the second is a better deal.
Compare the Introductory Rates
Many cards will offer a low introductory. Sometimes, they offer zero interest. You should compare not only how low the introductory rate is, but also how long it lasts. Zero percent for 15 months will be a better deal than zero percent for just 12 months.
Compare the Annual Fees
First, check if they each have an annual fee. Some cards don’t. No annual fee is the best deal. Make sure there really is no fee at all. Some cards initially waive the fee for the first year, but start charging a fee the next year. If you can’t get a no fee card, generally speaking, the lower the annual fee, the better. This should be stated clearly somewhere in the literature and you can then make an easy determination. The only way you should go with the higher fee card is if the fee covers additional benefits and features, such as insurance on your purchases, that you place a high value on and also cannot get with a no fee or lower fee card.
Compare the Regular Interest Rate and Fees
After the introductory rate and fee waivers expire, credit card interest is some of the most expensive interest around. There can be a big difference between cards, with some charging around 15 percent and others charging more like 25 percent. Using an interest calculator to compare rates and payments can be eye opening.
Compare Their Rewards Programs
Many cards these days have a rewards program. For example, they may give you cash back or airline miles. Read through the details and decide which rewards program is more appealing and beneficial for you. Make sure it is something you can actually use. If you never fly, you don’t need airline miles. You won’t ever use them.
Comparing the areas they are alike can help clear away any confusion. This can help you choose a credit card offer confidently.