Online Credit Card Comparison: What You Need to Know

When comparing one credit card against another, you quickly see that not all cards are created equally. While they all allow you to accomplish the same basic goal of making purchases on credit, the way they go about it differs greatly. If you want to be a savvy shopper, it's important for you to choose a card that fits your needs as an individual. And if you have a small business, the methodology presented below will also help you identify which business credit cards are the right fit for your business needs. Comparing credit cards online can provide you with the information you need to make an educated decision. When comparing, there are a few factors that you'll want to look at to ensure that you make the best choice.

Annual Fee

One of the areas that you'll want to look at when comparing is the annual fee. Many credit cards charge you an annual fee just for having an account. This fee is charged once a year and is typically a fixed amount. In some cases, the credit card company will waive the annual fee if your balance goes above a certain threshold. It is important to read the terms of the credit card to find out if your annual fee can be waived once you reach this level. Some credit cards do not require an annual fee. Without looking at the other factors, choosing a card with no annual fee usually makes the most sense.

Interest Rate

Besides the annual fee, the other way that credit card companies make the majority of their money is with interest charges. These interest rates are multiplied by your card balance to determine how much you pay in interest. Credit card interest rates can vary greatly from one case to the next. Some credit cards charge interest rates as high as 20%, while others have more affordable rates at 10%. This can be a big difference if you typically carry a large balance on your card.  

In addition to looking at the basic interest rate of the credit card, you should also look at the introductory rate. Introductory rates are typically lower than what the credit card will charge you over the long-term. For example, a credit card may offer an introductory rate of 0% for the first 18 months on purchases or balance transfers. Then after the 18 months is up, the rate jumps up to 15%. Finding a card with a 0% introductory rate can be beneficial if you want to transfer a balance from another credit card account. This will give you 18 months of no interest in which you can pay down your balance. Find out how long the introductory period is and then find out what the interest rate jumps to after that period is up. Also clarify whether the introductory interest rate applies to balance transfers and purchases or just balance transfers. Each credit card offer is different in this regard.

Rewards Programs

When shopping around for a credit card online, you also have to look at the rewards programs that they offer. In today's credit card market, many cards offer customers rewards for using their cards to make purchases. It is important to shop around and look at the terms and conditions of these programs before making your selection. If you do not choose the best rewards program that you can get, you are essentially leaving money on the table. These rewards can be used for free things like airplane tickets, hotel accommodations, food and electronics.  

When looking at the rewards programs, find out exactly how you accumulate rewards. Some credit cards give you one point for each dollar that you spend on the card. Others give you two points for each dollar that you spend on the card. In certain spending categories, you may be able to get even more points for each purchase that you make. Then take a look at how many points it takes to get something in the rewards program. If the program that offers double points requires you to get twice as many points to get something you want, you wouldn't gain anything by selecting it.  

Once you've weighed these factors, fill out the application and get approved for the card you want. Just be careful that you don't use more credit than you can afford to pay back in the future.

Contributor Andy writes about credit cards for the Australian credit card comparison website, CreditCardHelp.com.au. Click here to go to their website where you can find more of his writing.

Comments

[Abigail Fransisco]

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[BMW Bruce]

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