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Credit cards are a great option for people who want to be able to make purchases today and pay them off tomorrow. But because there are many different kinds of credit cards available to clients, it can be hard to choose one that really fits your personal purchasing patterns. If you’re planning on availing of a credit card and you’re not sure which one to pick, read this short guide on how to make the right choice.1

  1. Understand the Annual Percentage Rate – This pertains to the percentage rate that you need to pay off every year, averaged over the full term of the loan. By choosing a card with a smaller APR, you can expect smaller monthly payments. Compare the APRs of different cards to select the smallest value and help reduce the cost of your monthly bills.2
  2. Check for Insurance – There are lots of credit cards these days that come tied in with insurance. These are often benefits that are written deep in the fine print, which is why many clients use their credit cards for years not knowing they have insurance to go with it. If you don’t already have coverage, consider getting a credit card with life insurance, health insurance, or auto insurance to make the most of the service you pay for.3
  3. Learn More about Charges – Different banks issue different penalties and charges for missed payments. Before you choose a credit card, look into the charges and fees to get a better understanding of what you’re getting yourself into. While it’s always better to avoid getting penalized, there is no way to guarantee that you will be able to stick to monthly payments in the future.4
  4. Look Into Loyalty Benefits and Rewards – Many credit cards will give you rebates when you reach specific limits for purchases, and these are ideal schemes for those who intend to use their cards for everyday shopping and expenses. Often, banks only issue rewards for certain brands that they are affiliated with, so be sure to check their partner companies to see if these are products and services you’re likely to avail of.5
  5. Weigh the Interest Rate – An interest rate of 1% might seem like a small value now, but when you add it up to your monthly payments, it can become a major increase. There are some banks that offer introductory interest rates that will let you enjoy smaller rates at the start of your contract. While these seem like a good deal, it’s important to look into the rate increase when the introductory period ends to find out how much you will really have to pay later on.6
  6. Research the Bank – Aside from the credit card itself, the bank will also play a rather hefty role in your user experience. Banks with bad reputations when it comes to credit cards should be avoided at all costs, unless you want to go through the trouble of missing rewards, lost rebates, and extra hidden charges. Talk to a bank representative before you choose your banking establishment and find out whether they’re an institution you can rely on.

Ready to take out that credit card? Make the right choices and get a card that really suits your needs. Follow this short guide and get the best out of your new finance tool.