Credit card offers can be overwhelming for a consumer. When multiple credit card companies are giving a person an offer, it is very important to compare all of the offers. Just because a person is given a specific credit card offer does not mean the person should open that line of credit. Some credit card offers are better suited to some people than others. For example, if you travel a lot, then a card that offers travel rewards would be more beneficial than a card that offers cash back on department store purchases, for example. Here are some other key things to remember when comparing credit card offers.
Interest
The interest rate will be one of the key factors when deciding upon a credit card. The interest rate is reflected in the Annual Percentage Rate (APR). This is the interest applied to the balance of the credit card after each statement. Credit card offers will attract consumers to accept the offers with a low APR.
However, it is important to examine the fine print with these APR rates to determine whether they are a low fixed-rate or a low introductory rate. A low fixed-rate means the credit card will have this APR as long as you have the card. An introductory rate means that the rate advertised is only for a specific amount of time, like 6 months or a year of having the credit card. So, when a card has a 0% introductory rate, consumers need to read what the interest rate will be after that rate is no longer applicable.
Rewards
Rewards are what companies use to entice consumers to sign up for a credit card offer. Credit card rewards are programs where the consumer will be given a rebate or a financial incentive for a specific investment. One of the most common rewards are airline miles or hotel points. For every purchase done on such credit cards, a small unit of airline miles or hotel points is given to the credit card holder. Ideally, the more consumers purchase with the credit card, the more likely they can have a discounted airline ticket or a hotel stay in the future. However, this type of reward may not be beneficial for a credit card holder who does not travel often.
Another rewards program includes cash back. This is when a small amount of cash is put into a rebate account every time the consumers purchase something with their credit card. After enough purchases, consumers can cash out their cash rewards for money in their pocket. Or, they can transfer that cash rewards for coupons at retailers or discounted gasoline for a motor vehicle. Again, such a program may not be seen as beneficial for some consumers. Hence, consumers should weigh if it is truly worth opening a line of credit with such a credit card when the rewards may sit unused.
Security
In this high tech age, it is essential to consider the security of your potential credit card. For example, some credit cards may offer free credit reports that can help consumers know if their credit is healthy. Another company may have specific identity theft mechanisms that go beyond the federal requirements placed upon credit cards. Look to see if the credit cards offered have any additional security mechanisms and contemplate if these services are necessary.
If you’re concerned about security and you aren’t satisfied with the reassurances of your potential creditors, a prepaid credit card may be a good option. If the number is stolen, you can’t lose any more than you’ve loaded onto it, and it won’t affect your credit.
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Posted on May 18, 2023