Get The Right Credit Card Here

Credit cards are by far one of the most popular and easiest forms of short term financing facilities that many of us have. The main reason for its popularity is the most lenders actively push this product to consumers. Most will simply sign-up either with no intention of using it or may use it at a later stage. The problem is that the new credit card can be a very dangerous item especially if you don’t know how to use it properly. For most people it is the single most blamed debt instrument for causing their bad credit scores.

Instead of simply taking any credit card that comes your way the smart move is to be selective with the types of credit cards that you have. The type of credit card that you should have has to be dictated by your own lifestyle and which card can offer you the most benefits for your current lifestyle, spending habits or job description. A few questions that you have to ask yourself are as follows:

- Do you travel much and if so what type of transportation do you spend most on?
- What type of reward system do you prefer, cash or points?
- Do you always have a policy of always clearing your outstanding amount every month?
- Do you need a card which added safety features?

After answering some of these answers you should then look for a card that can best benefit your pattern of spending. The first thing to note is that nothing is life is free. If you expect to have more benefits and rewards then you have to be willing to put up with higher annual fees and also interest rates. Its important to realize that banks and credit card companies always push their cards to make money and you will always have to pay for the use of a credit card.

There has been an increasing trend towards the use of low interest rate credit cards. Almost all banks and credit card institutions have a card that they sell as a low interest option to consumers. On initial observation this is indeed a good idea as you can now hold a balance on your account without incurring silly amounts of money for interest. There are however some less know facts about these cards that may make you weary of them.

These cards are almost always of the no-frill type where there are generally no reward programs or any other benefit associated with the card. The interest free periods are generally the same between 40 and 55 days. Their late payment fee is normally higher than those of normal cards.

It should be noted that these types of card are only beneficial to a certain type of user even though it is marketed at all credit card holders. Users that will benefit most from these types of cards are those that have outstanding balances in their card almost every month and users who don’t pay off purchases within the interest free period. Users not looking for membership benefits and also looking for flexibility when it comes to medium term credit suit this card the most.

Most users that are able pay off their debt at the end of the month will benefit most from the use of normal credit cards which have benefits attached to them. Normal credit cards have slightly higher interest rates attached to them (between 12-18% p.a.) and have an interest free period of about 55-60 days. These cards are the ones that we have been holding for years but are still one of the most balanced options available.

This type of cards are best for users who are more disciplined and are able to pay off their monthly balances religiously. By paying off the monthly balance you will not be exposed to the high interest rates, late fees or other processing and administration charges associated with owning cards like these. Most of the time these cards also do not have a yearly charge, ones that do can easily have them struck out with a mere phone call to the company. It also makes sense to use the card for as many transactions as you can so you can accrue points with very limited costs.

On the other end of the spectrum from budget low interest cards are high worth cards which have much higher limits than normal cards do. These are normally labeled as gold or platinum cards and only offered to current customers who have shown a spending pattern that fits the requirements of the card. These cards have higher interest, higher annual fees and also much bigger penalties if there are any financial infractions on the card like late payments etc. The main benefit of the premium card is that there are many greater rewards programs in place that can save you thousands if you make use of them carefully. These rewards are normally on high value items like high-end restaurant discounts, business class access etc which only higher worth individuals can fully make use off.

On the whole these cards have a very high income requirement meaning you must show that you have a very high income before you are eligible to receive the card. These high requirement although may limit the market are necessary to protect the image of the card and also offer rewards that are in-line with the prestige of the individuals who own the card. These cards are best for those who are very disciplined with the use of their card and are able to settle their card balances off monthly. The use of the card should also be for even smaller day-to-day purchases like super market purchases or even your fuel so you can rack up the points which can be converted to important reward items at a later stage.

There is also a special sub-set of premium cards that are developed especially for customers that travel a lot. These may be company executive types who can rack up large bills for air tickets and hotels. The cards specially developed for these people have a point system that is set-up to favor the card’s use with travel related items. The redeemable points are also biased towards holiday type items. Some executives have reported that the use of such cards can be extremely beneficial as some are able to even redeem a holiday at the end of the year with the proper use of the card.

In deciding which card is most appropriate for you, you must first have a good understanding of your own spending patterns so you can apply for the appropriate card. It sometimes even pays to discuss your financial need for a credit card with a financial advisor before making a choice.