Choosing the Right Credit Card For You

Okay, you've found your way to this site and you've seen the wide array of credit cards available from a whole host of companies. With such a variety of choice how can you decide the right card for you?

Before looking at cards, it's important to look at your current situation, it's no use getting a card because it rewards you with airmiles if you never leave the country. Similarly it's useless getting a card because of it's low interest rate if you are going to pay off the card balance immediately. In general there are four different groups of credit card user; those that pay off their balance straight away, those that pay off a portion of their balance every month, those with outstanding debts elsewhere, and regular travellers.

“I pay off my balance in full”

Most credit cards have an interest free period on new purchases. Meaning that if the balance is paid off in full before this time (usually around 56 days), no interest is charged on the balance. Some users will use their credit cards simply as a way of monitoring their spending, and by paying off their debts when they are billed, they avoid the interest accruing on their account. For these users the interest rate of the card becomes less important, and the benefits of owning the card come to the fore. Consider getting a card that gives the you rewards or cashback as you spend. You can compare rewards cards here. http://www.comparesaver.co.uk/reward-credit-cards

“I'll pay some of my balance off each month, but not all of it”

When billed each month, the holder of the credit card will have a minimum amount to pay on their balance. Usually this will be 2% of the bill, or £5, whichever is greater. This isn't normally the best way to pay off your bill, as you will find that most of that is taken up with the interest that has accrued over the month. It is also worth noting that payments received with usually be taken off the debt you owe with the lowest interest value, meaning it will take longer to pay off. For example if you have a card where you have borrowed £1000 on purchases at 17%, transferred a £500 balance from elsewhere at 5%, and removed £100 of cash at 25%, any money paid to the card company will be taken off the balance transfer debt first, due to it's lower APR, meaning the card company will earn more money from you. It is always wise to pay more than the minimum amount so as to make inroads into the balance. For this kind of user it's advisable to look for a card with a zero percent purchase offer. These cards will have a period over a number of months from the opening of the account, where interest is not charged of purchases made using the card. If you are willing to change accounts once the promotional period expires then it is possible to change from card to card and benefit from a zero percent offer several times. If you are unwilling to go through the hassle of changing accounts, then it is important to find a card that has a low interest rate once the promotional period expires. You can find cards with a zero percent purchase offer here, http://www.comparesaver.co.uk/zero-percent-purchase-credit-cards, and low rate credit cards here, http://www.comparesaver.co.uk/low-rate-credit-cards

“I currently have debts elsewhere I want to pay off”

if you have debts in other places that you are finding hard to pay off, you consider taking advantage of the zero percent balance transfer period that is available on many credit card accounts. This way you can go a number of months without having to pay interest on your debts. There will still be a balance transfer fee, but this will usually be much smaller than the interest you are paying on the debt. Again as with zero percent purchase offers, you can continue to move this debt around between several cards once the promotion expires.

You should also bear in mind that any new purchases will be charged at the standard rate for cards, and that when paying off balances, the debt will be taken from the balance transfer so that the purchase debt accrues more interest.

You can compare the best balance transfer deals here http://www.comparesaver.co.uk/zero-percent-balance-transfer-credit-cards

“I'm out of the country often”

Those people that travel regularly will probably want to use their card abroad. Due to the global networks that the major credit card companies operate under, a credit is an easy and safe way to pay overseas. Unsuspecting customers may not be aware that providers of the different cards will have varying overseas usage fees which need to be taken into account before deciding on a card.

It's also important to look at the other features such as the card offering replacement cards for those that are lost and stolen, or assistance internationally and insurance on flights, luggage and injury. Many cards also offer airmiles which can lead to big savings for those that spend regularly. Airmiles cards are available here http://www.comparesaver.co.uk/airmiles-credit-cards

Another option is to try out a prepaid credit card. These cards, which are relativley new, work much in the same way as a pay as you go mobile phone, where the user loands the card with a certain amount of money that they are willing to spend for a small charge, and they cannot spend any more than that. The advantage of this is that it makes it a lot easier to budget as it prevents overspending, which is all to easy abroad. The main disadvantage though is that the card can end up being no use during an emergency as you don't have access to extra funds that you may require. For this reason it may be a good idea to have a backup card that you can use in the case of such an emergency. Prepaid cards are available here http://www.comparesaver.co.uk/prepay-credit-cards

As you can see, you may be a part of several of these groups, in these cases it's always a good idea to try and find a compromise of the features that you need to get the best package for you.