If you haven’t shopped around for a new credit card lately, you may be shocked at what you find on the market. Over the last few years, due to new financial regulation, many credit card companies have lowered their rewards and increased their fees. However, the basics have remained the same, and here is what you should look for in a new credit card.
Interest Rates
The first thing to look at is the interest rate you’ll pay for purchases (or for any other features of the card you will use, like cash advances). With interest rates at all time lows, you would think that credit card interest rates would be low. However, they have remained the same, with the best rates averaging around 9.99%, but with many cards still touting rates closer to 20%. If you plan on carrying a balance, make sure you get a low rate!
Fees
You’ve probably heard about banks charging more fees on just about everything. However, there are still many great credit cards out there that don’t charge fees. Make sure you read the fine print, ensuring that you don’t pay any annual fees or other fees for using the card.
Rewards
The next thing you need to look at is the rewards the credit card offers. Rewards have gone down over the last few years, but you can still find good rewards that match your needs. Ask yourself what you will do, and what rewards will best suite your needs. For some, that could be points, where you can redeem them for stuff. But for others, it could be travel rewards, where you can earn airline miles or hotel stays. If you can’t decide what is best, you can always get a cash back rewards card.
The important thing to consider with rewards is if they are worth it. For example, a cash back card can earn you 1-2% cash back on purchases. So, if you choose points, are you getting a better deal than cash back? Keep that in mind when you calculate the value of your rewards.
Other Stuff
There are other things to consider as well – such as special promotional offers for signing up. These could be 0% APR, 0% balance transfers, or free rewards immediately. Keep these promos in mind when you sign up. If you still don’t know, consider comparing credit cards at Totally Money for more resources on comparing credit card offers.
