Top Tips for Choosing a New Credit Card

Changing your credit card is simple and can save you money

"Many people rarely consider changing credit cards but there are some great credit card providers who offer competitive rates and other benefits."

Here are some of the things to look out for when thinking about choosing a new credit card

Balance Transfers
Great for people who have an existing credit card balance; this can help to cut the cost

Cashback
Make money from your credit card spending; some cards offer up to 1% of all spending as a credit back to your account. There are also some cards offering even higher cashback rates for spending at specific retailers.

Spending Limit
If you want a credit card to help you manage you spending make sure you look out for cards that allow you to taylor your spending limit; most providers allow you to reduce the limit on you credit card if you ask.

Loyalty Points
Similar to cashback this means you get rewarded for you spending in the form of points which can mean free flights or can be redeemed against a range of goods and services.

Purchase Protection
Typically provided for most things you buy on a credit card.

Fraud Protection
Often this will ensure you get a refund for any loss you incur as a result of any fraud related to your card

Identity Protection
Some credit cards are now offering this service which provides advice and guidance if you suffer from identity theft

Foreign transaction fees
Look around at different cards and you will see some big differences in the cost of using your card abroad; consider this if you do lots of travel.

Annual Fee
Some cards charge an annual free. This will often be because the card offers better rates or enhanced services such as cashback.

General fees and charges
Like many financial services credit cards have a number of fees and charges which can soon add up and you should check these out before making any decision

Y0u may also want to consider who is providing your credit card before you make any decision. You will typically find that there are a number of options for selecting a new credit card provider, you could choose for example to take a credit card from your bank where you have your current account, or alternatively you may choose to use a service where your credit card is provided by another firm such as a supermarket.

When selecting any credit card you may want to think about how simple or complex your needs are and specifically you may want to think about how you want to access and manage your card.

For example you may want to consider if you want an online credit card service which allows you to view you transactions and balances online; you may even want to pay off your current balance online. Alternatively you may be someone who really want to know they will get a good level of customer service with access to a telephone help desk, it all depends on what you need.

Finally you may want to consider the other tools the credit card comes with, some providers now offer free SMS alerts to remind you when your payment is due and to alert you when your near your credit limit. Other credit cards provide tools which allow you to gain some understanding of you spending by telling you how much your spending on your card against various types of spend.

As always you need to consider your needs, understand what the various credit card providers are offering and find the best deal for you

Credit cards can help you manage you spending

Credit cards can be a great tool to help you manage you spending and as addition to your current funds if you have some short terms needs.

Beware of the long term cost of borrowing via a credit card, the cost can soon add up to a significant amount.

You should look at the best deals on the market for a credit card since these change often and the range of charges, interest rates and benefits can vary

An alternative to a credit card can be the use of an overdraft on a current account; these can be more cost effective although often need to be pre arranged with you bank.

Many banks charge different rates of interest on an agreed overdraft (planned) and these are typically lower than an unapproved (unplanned) overdraft.

"Another alternative is a loan, either secured or unsecured."

You normally find a secured loan is lower cost than using a credit card, although this also depends on how fast you planning on being able to pay back you credit card and clear the balance. Secured loans are typically used when the item you buying has a value the lender can recognise, a typical example would be a car loan.

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.