Shopping Around For The Right Credit Card
Can Save You Time And Money
Card Shopping Tips
Keep these tips in mind when looking for a credit or charge card.
- Shop around for the plan that best fits your needs.
- Make sure you understand a plan's terms before you accept the card.
- Protect your cards and account numbers to prevent unauthorized use. Draw a line through blank spaces on charge slips so the amount can't be changed. Tear up carbons.
- Hold on to receipts to reconcile charges when your bill arrives.
- Keep a record - in a safe place separate from your cards - of your account numbers, expiration dates and the phone numbers of each issuer to report a loss quickly.
- Carry only the cards you think you'll use.
Choosing The Right Credit Cards
Chances are you've gotten your share of "pre-approved" credit card offers in the mail, some with low introductory
rates and other perks. Many of these solicitations urge you to accept "before the offer expires." Before you accept, shop around to get the best deal.
Credit Card Terms
A credit card is a form of borrowing that often involves charges. Credit terms and conditions affect your overall cost. So it's wise to compare terms and
fees before you agree to open a credit or charge card account. The following is an important term to consider that generally must be disclosed in credit
card applications or in solicitations that require no application. You also may want to ask about these terms when you're shopping for a card.
Annual Percentage Rate. The APR is a measure of the cost of credit, expressed as a yearly rate. It also must be disclosed before you
become obligated on the account and on your account statements.
The card issuer also must disclose the "periodic rate" - the rate applied to your outstanding balance to figure the finance charge for each billing period.
Some credit card plans allow the issuer to change your APR when interest rates or other economic indicators - called indexes - change. Because the rate change
is linked to the index's performance, these plans are called "variable rate" programs. Rate changes raise or lower the finance charge on your account. If you're considering a
variable rate card, the issuer must also provide various information that discloses to you:
- that the rate may change; and
- how the rate is determined - which index is used
and what additional amount, the "margin," is added to determine your new rate.
At the latest, you also must receive information, before you become obligated on the account, about any limitations on how much and how often your rate may change.
Other Costs and Features
Credit terms vary among issuers. When shopping for a card, think about how you plan to use it. If you expect to pay your bills in full each month, the annual fee and other charges may be
more important than the periodic rate and the APR, if there is a grace period for purchases. However, if you use the cash advance feature, many cards do not permit a grace period for the
amounts due - even if they have a grace period for purchases. So, it may still be wise to consider the APR and balance computation method. Also, if you plan to pay for purchases over time,
the APR and the balance computation method are definitely major considerations.