Choose a Credit Card Based on its Terms and Conditions

Almost everybody receives numerous credit card offer letters in their mailboxes at least once a week… if not every single day. The envelopes usually contain some sort of wording like, "This is the last chance!" or, "Offer Expires Soon!"

With so many pieces of mail arriving on a frequent basis, all written with similar "rush" tones, it's hard to figure out which one is really a genuinely good offer. It can be tough to compare the differences between potential credit card accounts because they may seem exactly the same at first glance, but may be very different once the fine print is read and understood.

So, before blindly filling out the application for a credit card that looks good at first glance, make sure to carefully go over the details of the card, and make sure it's really the best one available.

Fees
Are there fees associated with the credit card? Many credit cards offer "no fees" for the first few months that the account is open, but then begin charging fees for making purchases, using the card for cash advances, and sometimes there are even annual fees for owning the card! Different credit card companies charge different fees for the same services, so comparing the fees on all potential credit card offers can help determine which card is the best deal.

Annual Percentage Interest Rate
The annual percentage interest rate, or "APR," on credit cards is one of the details of the card that is easy to determine. Obviously, a card that charges 2.9 percent on balances is going to be a better deal than a credit card that charges 15.9 percent on balances. However, one thing to consider is whether or not the APR is a variable rate. If it's variable, that means that the credit card company can raise the interest rate. So, read the fine print on the back of the credit card application to determine whether or not the APR is fixed or variable, and if it's variable - find out the terms of possible raises in rates.

Interest rates can also vary depending on the type of charge on the card. For example, purchases may be at a 2.9 percent interest rate, but cash advances may be at a much higher rate. For anyone who truly believes that they will never use their credit card for cash advances, this difference in interest rate percentage may not be a concern.

"Miles" or "Points" Cards
Besides credit cards that can be simply used for purchasing goods and services, some credit cards offer frequent flyer miles on designated airlines or "points" that can be used in a specific store when dollars are charged to the card. Most times, for every dollar charged, a mile or a point is earned. These types of credit cards usually have steep annual fees associated with them - usually between $50 and $100 per year. However, many times the annual fee is worth the cost if enough points can be earned to actually earn some sort of reward, such as a round-trip airline ticket.

Making Payments
Different credit cards are on different monthly payment schedules. Some require that payments be made every 30 days, and others are slightly different. It's important to choose a credit card that has a billing cycle compatible with when money will be available to make the payments. Also, all credit cards will charge late fees if monthly payments are made late. Make sure to choose a credit card with the least severe penalties for late payments (although it's best to NEVER send a payment later than its actual due date).

With so many credit card choices and so many potential offers arriving practically daily in the mailbox, it's not a good idea to jump on the first one. Gather a few that look good and carefully compare all of the cards' terms and conditions, fee structures, interest rates, and payment schedules, and use that to determine the very best one.