Credit Card Comparison Guide Tips
Read these 12 Credit Card Comparison Guide Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Credit-Cards tips and hundreds of other topics.
The two-cycle finance charge
Cross credit cards off your credit card comparisons list if they mention a two-cycle billing method for calculating finance charges. With a two-cycle billing method, your credit card company can retroactively charge you interest for items you bought in the previous billing cycle starting on the day you bought the item. This is expensive for you and totally uneccessary. There are many credit cards that calculate finance charges in a way that is much less harmful to your savings account.
Credit card comparisons
Don't sign up for any old credit card offer that comes in the mail. By conducting a credit card comparison, you can be sure to find the best credit card for your needs and lifestyle. To easily compare different credit card offers, create a chart that lets you view credit card account information from different cards side by side. You'll want to compare features like percentage rating, fees, and service charges. There are programs available online that will help you set up your credit card comparison chart, so look around for ways to make this process easier for yourself.
The daily balance finance charge
When you do your credit card comparisons, watch out for credit cards that calculate finance charges based on a daily balance. The daily balance method is to charge interest based on the amount that is owed to the account each day. Although this can be good for some people who pay off their credit cards early in the billing period, it can be expensive for those who carry a balance. Look for a credit card that uses another method to calculate finance charges.
Find out how your credit card calculates finance charges
When you are conducting credit card comparisons, make special note of how often each credit card company calculates finance charges. You'll find that most credit cards will calculate finance charges in one of four ways: with an average daily balance, a daily balance, a two-cycle balance, or a previous balance. Check with your credit card company to see which method they use.
Comparing rewards
Look for a credit card that offers rewards for things that you plan to buy. When you do your credit card comparison, you'll be surprised at the number of creative incentive programs that the credit card companies have established. Credit cards are now available that let you earn airline miles, long distance phone minutes, gas coupons, cash, movie tickets and even a voucher toward a car purchase. Looking around for the best rewards deal can make credit card comparison shopping fun.
The previous balance finance charge
When you are doing your credit card comparisons, look for a credit card that calculates finance charges based on the previous balance. Previous balance finance charges are interest that is accrued based on the final amount owed at the end of the previous billing cycle. Any amount that you have charged since the close of the billing period will not be charged until the next cycle is over.
The average daily balance finance charge
Find out if your credit card calculates finance charges based on your average daily balance. This means that your finance charges are based on the daily average that you hold in your account. Over the billing period, the daily averages are added together and then divided by the number of days in the billing period to determine interest due. This is more expensive for you than calculating by the adjusted balance method, but less expensive than calculating by the previous balance method.
Comparing credit card fees
When conducting a credit card comparison, be sure to review the fees first. Most credit cards are available without annual or monthly fees as long as you have a good credit score. If you have bad credit, you may have to pay extra fees to secure the account. All credit card accounts will have late, over the limit, cash advance, and balance transfer fees associated with them. However, the fee amount will vary depending on the credit card company. Look for a fee chart online or in the brochure application that you receive in the mail. By taking special note of credit card fees when you do your credit card comparison, you can avoid spending money that you don't have to.
Credit cards and discounts
When you are doing a credit card comparison, look for credit cards that are partnered with businesses that you purchase goods and services from regularly. Because credit cards often offer discounts when you use them and participating stores, finding out which merchants are affiliated with your card can add up to substatial savings over time. Business credit cards sometimes have discounts for business-related companies, such as Kinkos or Office Depot. Personal credit cards can have discounts for everything from groceries to theme park tickets. Shop around for the best credit card deal for you.
Comparing interest rates
When you go to compare credit cards, put high priority on a low interest rate. If you aren't able to completely pay off your credit card bill each month, your interest rate will determine how much extra you will owe your credit card company. For those who use credit cards often, even a minor difference in the interest rate can make a big difference in how much you end up paying.
Many credit cards have low or 0% introductory interest rates for new customers. These are a great opportunity to consolidate higher interest rate loans and can help you get back in control of your finances. However, make sure that you know when the introductory rate ends and what it will revert to.
Worldwide acceptability
If you do a lot of travel, you'll benefit most from having at least one Visa or Mastercard credit card. These are the most widely used credit cards and will be accepted in most areas that you travel. Following Visa and Mastercard are Discover and American Express. A unique benefit of American Express is that you are able to purchase travellers' checks through them. These are insured against theft and accepted in most places.
Before you travel to a foreign country, look into your credit card's currency exchange fees. Although there are still a few cards that don't charge you a fee for using credit internationally, most do. It's important to know ahead of time what the fee is going to be.
Grace periods
Your credit card comparisons should include mention of the grace period that each credit card allows. Grace periods are a length of time between 20 and 30 days when interest does not accrue on the charges you have made on your credit card. If the balance is paid in full by the end of the grace period, no finance charges will be added to the account. This is a great way to leverage your credit and build a solid credit score. If you make a payment after the grace period has ended you will be charged interest.
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| William Pirraglia |
