How to Choose the Best Credit Card Offers for 2013
Financial institutions throw in a wide range of products for consumers to apply for, and it may seem like the major card issuers, local credit unions, banks, and other lenders are regularly extending credit card offers to you. While the desire to act impulsively and take advantage of some of the fabulous invitations you receive through email or regular mail may be great, it is in your best interest to review the applications carefully and to be discerning about the offers you pursue. Some perks are designed to benefit specific consumers or to be used most strategically for certain purposes. In addition, some options may be more affordable for you to use than others. By taking time to review the credit card and fine print carefully, you can easily find the accounts that will most closely benefit you.
Your Credit Rating
As a first step, consider what your credit rating is. You may receive some offers that advertise incredibly low annual percentage rates or amazing rewards programs, but receiving an offer does not necessarily mean that you will qualify it. If you have a lower credit score, you may consider applying for a card that is designed for consumers with bad credit. These are cards with a low credit limit, and they may have a higher APR on purchases and balance transfers alike. However, their benefit is that they will help you to rebuild your credit rating when you cannot qualify for other offers.
Low Interest Rate
On the other hand, if you have excellent credit, you may qualify for a low interest rate deal. These may have an annual fee associated with them. If you carry a regular balance on your accounts, you may consider finding an option with a combined low interest rate and low annual fee. If you make a point to always pay your balance off in full each month, a program with no annual fee and a slightly higher APR may be more affordable for you to use.
Low Initial APR
Some banks may provide you with a low initial APR for a fixed period of time, such as 0% interest for first six months. These programs are ideal for consumers who plan to use a credit card to make a large purchase and who want to pay the account balance off over the next few months. For example, if you need to buy furniture for a new home or pay for a nice vacation, this type of cards will allow you to pay off your outstanding balance within a specified period of time without incurring additional charges. However, pay attention to the regular APR after the initial APR expires as well as to the annual fee that may be assessed.
Balance Transfer Programs
While some choices provide you with a low initial rate followed with a rate increase after an adjustment period, others provide you with a low rate on all balance transfers. This offer may extend to the entire balance transferred until the amount is paid in full, but your new purchases may incur a higher interest rate. If you are trying to pay down balance on other debts, however, transferring balances to a card with a balance transfer program may save you money and help you to pay your balance off more quickly.
Cash Back Programs
Cash back programs are increasingly popular. These are credit card deals that allow you to earn cash back rewards for all qualified purchases. You should read the fine print before taking advantage of them, however. Some of these programs limit the amount of cash that you can earn within a certain period of time, and some may only allow cash back rewards to be earned with certain types of purchases. Furthermore, compare the rates and fees associated with these programs closely with other offers available to you. Interest charges and annual fees on these offers can be high in some cases, and these can actually end up costing you more money than you may earn through the rewards.
Airline and Travel Programs
Consumers who love to travel may be enticed to apply for offers with airline or travel rewards programs. Those with airline miles are the most popular, but there are also deals that will provide you with credit toward hotel stays, rental cars and other travel expenses. As is the case with cash back rewards programs, you should read the fine print to review the qualifying purchases, limitations and other rules that may affect the benefit of the offer to you as well as your costs associated with using the card.
Alternative Rewards Options
There are also other types of rewards programs that you can choose to apply for. These programs are more general in nature, and they may allow you to earn points on purchases, interest charges, balance transfers and more. The points may be redeemed through an online store, and they may be used on everything from small household appliances and clothing to gift cards, account credit and more. Some will use these rewards to buy necessities for their family, holiday gifts for others or little extras that they otherwise could not afford to buy.
Prepaid Credit Cards
Prepaid credit cards are ideal for those who want to enjoy the benefits associated with using plastic but without the possibility of accumulating debt. With this option, you load funds onto the card before you make purchases, and you are not permitted to make purchases beyond the amount of funds loaded onto the account. Once you have reached your credit limit, no additional charges will be permitted until more money is loaded onto the card. You can easily make online purchases and enjoy the convenience of carrying a card without the risk of building debt or overspending.
Student Credit Cards
If you are a college student, you may consider applying for a card designed specifically for students. Traditional college students generally have little to no established credit, and these types of cards provide you with the ability to establish a good rating early in life. Your credit limit may be relatively low, and your APR may be higher on these accounts. In some cases, one of your parents may be required to co-sign on the account. While these credit cards may have some downsides, they are ideal to use as a starter credit card. Once you have established a solid rating, you may consider applying for a more affordable or advantageous type of credit offer.
Business Credit Cards
Business credit cards are suitable for smaller and larger businesses alike. These may allow you to issue separate cards to different employees, to set individual credit limits for each authorized user and even to revoke spending privileges on the cards on an individual basis. You may also enjoy online management features, such as the ability to monitor purchases for each user with ease. Before you apply, compare rates and fees, online management features, credit limits and rewards offers available.
There are dozens of credit cards that you can apply for today, but their benefits and ways to earn points or rewards vary considerably. As you compare the different features, rates, rewards and more through local or national banks, you may discover that some offers are more suitable and beneficial for you than others.