There are lots of credit cards available for us to choose from and it can sometimes be tricky to work out how to pick the best one. It might be confusing if you ask people as they may all like different ones or different providers will all claim to be the best. The reason for this is because we all have different requirements when it comes to store cards and therefore, we need to think about what we want and then match that to the card which is best for us. So, it is a good idea to think about what you want to start with. You may have some ideas but consider things like
- Cost– the cost of the credit card is normally just the interest rate. However, there will be some credit cards that also have an annual fee, so watch out for those. It may not be a bad thing to pay the fee, but it depends what you get in return. The idea is to try to find the credit card that will provide you with the best value for money. You can only calculate value for money though, if you know how much it costs. The interest rates on credit cards does tend to be pretty high but it can vary and so it is well worth looking at the different cards to see what the costs are. At this stage you may feel that if you always repay the full balance and therefore do not ever pay interest, that the cost is irrelevant. However, it is worth noting it anyway. This is because you never know when you might struggle and need to repay less on your card and you will therefore have to pay the interest. There may be other things that take priority over cost if you feel you will not be paying interest, but you should bear it in mind anyway.
- Credit limit – for some people the credit limit could be really important. The credit limit is the amount of money that we are allowed to spend on the card and this will vary with lenders. It may go up, once you have held the card for a while and the lender feels that they can trust you. If you are picking between them though, you will not know if they are likely to put the limit up, so you will just have to go with what is being offered. Consider how much you think that you will need and see how that matches up to what is being offered.
- Reputation of lender – some people will also be concerned with the lender. They might want a lender that is well-know, perhaps one they have used before, that they have read good reviews about or that has been recommended to them. There are lots of factors with regards to the lender which could potentially be important and you should think about what matter to you. It is wise to make sure, that if you are speaking to others or reading reviews, that you bear in mind that what you want from a lender might be different to others. Therefore, one that matches their expectations may not match yours and vice versa. So, make sure that if they state a lender is good or bad, that you find out why they think this.
It may therefore take a bit of time to find out which credit card will be the best for you. However, it is well worth putting the time into doing the research as it could make a big different to the cost and the experience that you end up having with the lender.