If you’re like most people, you probably receive random credit card offers in the mail on a
regular basis. But with so many different types of credit cards out there, how do you find
the best credit card deal?
Should you opt for a card with no annual fee, or one that will allow you to rack up gobs
of rewards points? If your credit is less than perfect, how can you find a card that won’t
charge you an exorbitant interest rate? And what’s a good interest rate these days anyway?
Clearly, answering all these questions—let alone sifting through the array of potential cards—isn’t always easy or clear-cut.
Fortunately, there are some ways to narrow down your search and help you find the best
credit card deal, based on your credit rating and other factors.
After all, if you’re going to apply for a credit card, do a balance transfer, or take a bank up
on its offer for a new card with a “low introductory rate,†you want to make sure you have
a reasonable good chance of getting approved, and that you’re not just wasting your time,
right?
With this in mind, here are five important tips to follow when searching for the best credit
card deal:
1. Use a Credit Card Comparison Site
The single best way to see what credit card options exist, given your financial standing, is to do some comparison-shopping online. Start by checking out CardRatings.com, a consumer education and credit card comparison site.
CardRatings.com offers editor and consumer reviews of every type of credit card
imaginable — from student and business cards to cash back and travel cards and more.
The site helps you decide what card best fits your spending habits and financial profile,
get the best rates available, and ultimately lower your credit card debt. Best of all,
CardRatings.com is free to use.
2. Read the Fine Print
Most of us don’t take the time to read the fine print in credit card offers. But as I’ve
previously explained, reading the fine print on any credit or financial transaction can help
you avoid being suckered, or even ruining your credit score.
At the very least, it’s smart to know the fine print before you fill out a credit card
application because you don’t want to get disappointed if the deal doesn’t work out to be
as sweet as you thought it might be. For example, just because a bank or credit card issuer
touts a rate “as low as 8.9%,†that doesn’t mean you’re necessarily going to qualify for
that rate. They may specify, in the fine print, what credit rating or other conditions and
requirements you need to meet in order to nab that ultra low rate.
3. Be Aware of Annual Fees and Other Charges
Because of recent regulatory changes, banks and credit card issuers are stepping up their
efforts to collect fee income from consumers. Some credit cards impose an annual fee just
to maintain the card, but there are still plenty of card options that don’t have any annual
fees—throughout your cardholder agreement.
For those that do have fees, you may be able to get the annual fee waived during your first
year as a cardholder, or in subsequent years. You’ll never know unless you ask for that
fee to be waived. Whatever the case, just be sure you’re aware of whether a card you’re
considering imposes annual fees or other charges. If so, the benefits of the card should far
outweigh those fees in order to make the card worthwhile.
4. Find Out If Special Deals Or Zero-Interest Offers Available
Many credit card issuers attract new customers by extending low “teaser rates†or even
zero-interest offers where the cardholder pays no interest on either purchases or balance
transfers for the first six to 12 months.
If you are planning to coordinate a balance transfer or want to make a larger purchase that
won’t collect interest, look for a card with this type of promotional offer. Just make sure
you are able to pay off the entire balance before the promotional period is over. Otherwise,
you’re on the hook for those interest charges.
5. Watch Those Balance Transfer Fees
If you want a new credit card for the purposes of initiating a balance transfer, switching
credit cards is usually a fairly easy process. A balance transfer can even boost your credit
score.
But each credit card issuer will impose a fee for each transfer. This is usually a percentage
of the amount transferred, and can vary by issuer. A 3% transfer fee, or a maximum charge of $75 or so is common. So if you plan to transfer large balances, make sure you’re aware of how much you will be paying in fees, and seek out the lowest rate possible when selecting a credit card.
By some estimates, there were 171 million MasterCard brand credit cards and 269 million
Visa credit cards in circulation in the United States in 2010 alone. That’s a huge number of
credit cards—not to mention other credit and charge cards like American Express, Discover and so on.
Since this industry is so competitive, it pays to seek out the best credit card deal available
and ensure you are paying the lowest possible rates on any balances you may carry.