Eight ways to compare credit cards

Not all credit cards are equal, and compare the different offers can be a challenge. What is best for one person may not be in another, so it is important to weigh various factors, including interest rates, fees, rewards programs and member benefits.

Brad Stroh, co-CEO of Bills.com, lists some factors to consider when you want to compare credit card offers.

1. Types of cards
Credit cards vary widely, but are divided into three main classes.

* Secured cards require a security deposit and are suitable for those with no credit history or whose history is negative.

* The conventional cards do not require any deposit, but offer few advantages. Credit limits are broader than secured cards but lower than the card front.

* The first line cards (gold, platinum, titanium) offer larger credit limits and usually have additional benefits such as travel insurance or services in case of emergencies.

2. Grace Period
The number of days that are granted to pay the entire bill without generating finance charges.

3. How to calculate the finance charge
This is the dollar amount you pay to use credit and depends in part on the outstanding balance and annual percentage rate (APR). Companies use different methods to calculate the outstanding balance. The method used can significantly influence the finance charge. The outstanding balance can be calculated on one or two billing cycles, including or excluding the balance and new purchases made using the adjusted balance, average daily balance or previous balance. Consult your card’s minimum finance charges.

4. Fees and Charges
Some cards fixed annual fees, fees should exceed the limit, penalties for late payments, fees on foreign transactions, fees on balance transfers and more. Pay attention to the fine print.

5. Characteristics of cash advances
Most advances have a higher interest rate than normal purchases. If you are planning to request cash advances, learn about conditions (cash, “checks”, APR, fees, limits and how payments are credited).

6. Credit Limit
The credit limit is set based on your credit history, but some cards have a preset limit.

7. Incentives and rewards programs
With rewards cards can offer cash rebates for purchases, online access to your account, frequent flyer miles, additional warranty coverage, car rental insurance, travel discounts, concierge services and more. If you have no credit history or history is bad, you may need to establish a good credit profile before granting you a card with rewards and incentives.

8. Interest Rate
The interest rate stated in the offer of credit card and can be fixed or variable, but in practice do not vary much as the name implies. Cards with variable interest rates linked to an index of the APR, generally the prime rate (prime rate), and up and down as interest rates change at short notice in the general economy. If you choose a fixed rate card, you may think that it avoids the risk of fluctuating interest rates, but not so. Federal law allows card issuers to change any conditions of release, including the rate, with only 15 days in advance.

Are you the type of person who pays the entire outstanding balance each month, consider what it says Stroh: “a low interest rate is not as important as not having to pay annual fees or have a longer grace period long.

Unfortunately, many people lack the discipline required to promptly pay the total outstanding balance each month. If occasionally carries a debit balance on their credit cards, you should ask for a credit card with low interest rates. The difference between a low APR of 10 percent and an APR higher than 20 percent, is significant over time. Just remember that some cards have an introductory rate of zero percent which applies for several months to a year, but later is much higher. If you have to make major purchases, it is wiser to pay the outstanding balance during the time that still applies the introductory APR

If you plan to use the card to ask for cash advances, look for a card that has a lower APR and minimum charges for such advances, since the APR in this type of operation can be quite high. “Understand that a single credit card may have several APR,” says Stroh. “These included the APR for purchases, for cash advances, balance transfers to, penalties for late payments, initial APR, regular APR, which takes effect when the period ends the introductory rate, fixed or variable APR and TAE “linked to an index” (where different rates apply to different levels of outstanding balance). ”

To determine which credit card you choose, remember that each one has its own conditions that you must analyze and compare before completing an application.

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