Monday, 2 May 2011

Credit Card Clarity

Keeping it simple is the key but there are so many credit cards to choose from it can seem that there is no easy way to choose and indeed this is one of the primary reasons why many people decide to remain with their current credit card provider.

However, the best deals out there can save you money, or if you choose the right one actually make you money in the form of cash back or points.

"Cards with a low headline rate can sometimes get your attention but are not always the best deals for everyone"

Given that their are a very large number of credit cards available the aim here is to provide you the tools to make sure you know how to pick the best deal.

There are some key basic 'rule of the road' when your looking about and thinking about taking a new credit card out

0% (or very low) Rate on Balance Transfer
Yes, this type of card is very popular and you'll find a number of these credit cards on the market, look at the full details of the card to understand if this would be right for you.

Low Rate for Life of Balance Transfer
Its in the name, if you take out one of these cards and transfer an outstanding balance with a commitment that you will pay a low rate for the duration while your paying off the balance. Be aware that new spending typically attracts a different rate.

Reward Cards
Getting a free flight or other reward from your every day spending can be a great and often these cards give you some flexibility in the reward you can get.

Cashback Cards
These cards typically give you back between 0.25% and 1.5% of any spending on the card, which is great for anyone who is able to pay off the balance in full and avoid any interest but beware the rates on these cards are typically higher so you should not be using one of these if you dont regularly pay off the balance.

Credit Cards for Travel
Brilliant if you planning on doing lots of travel and don't want to carry round lots of cash. Watch out for the fees and the way these cards apply exchange rates so that you really can be sure how much things are costing you and there is no nasty surprise waiting for you when you get home

0% on New Purchases
Great for avoiding the need to pay for something but beware of the timing of any further payments your committed to since missing these can prove expensive

As you look at any of these types of cards its really important to read up on the credit card, make sure your aware of the rates, fees and charges since some of these cards come with some different rates on different types of spending.

Clearly these are just a few of the types of cards you will find on the market and as always the key is to really investigate the market but also understand your personal needs and make the right decision for your circumstances.

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