If you have made the decision to sign up for a credit card, your next step is to determine which credit card is best for you. Credit cards are not one size fits all, so be sure to do your research before signing up.
The first thing you will need to check before signing up for a credit card is how much it will cost you. We recommend doing extensive research into this before selecting a credit card. Most credit cards will require you to pay fees for some (or all) of the below:
While some banks may advertise ‘low account keeping fees’, you may find that they will make up the difference by charging extra for other fees. Be sure to get all the facts before you choose a credit card.
Similarly to the above point, some credit cards may claim low fees but have sky high interest rates. Interest rates are one of the most important elements when selecting a credit card. If you are able to commit to paying off your credit card in full every month, you would benefit greatly from a card that has interest-free days. This could mean that you avoid paying interest at all. However, be realistic about your ability to pay your bill, as cards with interest-free days will often have higher fees.
Many banks will advertise a ‘honeymoon period’, where interest rates on their credit card will be lower for a period of time. This can be a great way to save a bit of cash, but remember to check how much interest rates will increase after the honeymoon period is over. You might end up paying the same amount over two years as you would have on a different card.
While fees and interest rates are arguably the most important things to consider when choosing a credit card, other some other factors should also be considered. If you are keen on a rewards program, be sure to check out our previous blog post on the matter. It is also important to be well-educated on how to best use a credit card, and how to use it to your advantage. Many people have fallen into huge debt after signing up for a credit card, and we don’t want the next to be you!
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