What should you look for in a credit card? After all, they’re all pretty much the same, right? You just swipe it to make your purchase, pay it later, and you’re all set.
There are dozens of different things that make one credit card stand out from another. Some are very minor, such as color. Others are much more important such as interest rate, cash back rewards, and the company issuing the card.
After reviewing various aspects of the card, here are the main things we recommend that you look for.
1) A Good Interest Rate
Even though it’s great to pay off your whole balance every month, not everyone is able to do that. Life gets hard, and sometimes your present income just isn’t enough to pay off the entire card every month. In those cases, you want your interest rate to be as low as possible.
When you first sign up for your card, you probably won’t find one with less than 12-15% APR. Most cards are closer to the 18-27% APR though, so definitely pay attention to this and avoid cards with an interest rate that is too high.
2) A Respected Vendor
Luckily, there really aren’t that many credit card companies out there. You have four main ones- Capital One, MasterCard, VISA and American Express. We recommend that your card come from one of these four companies.
The main reason is that these four companies are accepted almost everywhere in the United States. Unlike smaller vendors, you can walk into almost any store and expect them to take one of these types of cards.
If you really want to make sure you always have access to your card, ditch American Express. It’s taken many places, but there are many stores and retailers who have chosen not to accept it due to its higher fees.
To be honest- most credit card rewards are a complete joke. Okay, so you earn back 1% cash back on purchases in certain stores. If you put $5,000 on that card each year, you earn back a WHOPPING $50. That’s nothing compared to what it cost you to get to that point.
That said, some credit cards will- especially when you first sign up- give you bigger rewards for certain things. For example, you might get 3-5% cash back for purchases at gas stations or grocery stores. In this case, you still aren’t making a lot back, but at 5 times as much as the 1% jokers, it’s not bad.
4) Reputation for Customer Service
This may sound silly, but you may want to consider the card company’s reputation for customer service before you sign up. Chances are you’ll have to spend time on the phone with them at one point or another- don’t you want a company that will actually help you out?
5) Automatic Fraud Detection and Prevention
This is a biggie. Make sure the credit card you sign up for has something in place to prevent identity fraud. Usually this is something that flags the company when major purchases are made, or multiple purchases from an area outside of your state.
There are other things you should look for in a credit card, but these 5 are a really good start. Good luck.