Choosing The Best Credit Card

There seems to be adverts for credit card deals everywhere at the moment, all offering different rates and incentives to try and get you to sign up. You may be trying to work out which one is best for you. Well, as you might think, the answer here depends on your personal financial situation. I will outline the 3 main types of credit card offer currently available and describe who they will suit the best.

0% Interest For A Fixed Period

This is probably the most widespread offer out there at the moment and for most people it is the best. With this deal the credit card company will offer you an interest rate of 0% for balance transfers for a fixed period, usually 6 – 9 months. This allows you to move some debt from another credit or store card where you are paying interest. It is a good offer because it enables you to pay off some of the principle over the course of the offer as no interest is applied.

When evaluating this type of offer the main factor to look out for is the length of the interest free period. However you should also take into account the minimum monthly payment % and the rate of interest charged once the offer has ended.

Low Interest For The Life Of A Transfer

This is another good offer. It allows you to transfer a balance to a new card where you will pay the same, low rate of interest until the amount is paid off in full. The rates available with these types of offer are usually at least 50% lower than standard rates.

Although this offer does not initially seem as good as the first it does have some benefits. You can budget over time how much you need to pay on your card every month as the interest rate will remain constant. Also you will not have to search for a new card every time your interest free offer runs out, which can be a hassle, because the low interest rate is fixed.

Rewards Or Cash Back

These credit card offers provide some kind of reward for every penny you spend with your card. The reward varies from card to card but they are generally cash back or points. With cash back you get a small percentage of what you spend each month credited back to your card. The point based cards give you a certain amount of points for each transaction which can be saved up and spent on a wide range of products from electrical goods to holidays.

This type of card is best suited to high spenders as the rewards are more significant the more you spend. They are also great for use with expense accounts. If you company pays off your card as expenses each month then you get to keep the rewards for free. You will find that these cards tend to have a higher interest rate attached to them so they are most suitable for people who pay off their cards in full each month.

Richard Heaney is the webmaster at Personal Financial Information. Find out useful information on a variety of different areas including credit cards, mortgages and insurance.