Choosing a credit card that is right for you seems like it would be a quick and simple decision, right? While it shouldn’t be challenging, it should be thoroughly planned out. Each credit card company offers multiple different credit cards to pick. Some have higher fees than others but provide more opportunities to collect rewards. Others have little to no charges, but higher interest rates.
As of March 15, 2018, Canadians that have a Chase Canada credit card will need to start looking for something different. Chase is exiting the Canadian market and shutting down their credit cards north of the border.
With this recent news, we thought a refresher on picking a credit card would be beneficial. So we came up with a few points on what to look for when choosing a credit card.
Why Are You Getting a Credit Card?
Decide what the purpose of the card is. Are you looking for one that will:
Depending on the primary purpose of the credit card, that can dictate the best card for you. If you are looking to build credit, a stricter card with a low limit might be a good starting point. If you want something there as an emergency fund, a small interest card might be worth looking into. But if you’re looking to earn some rewards from your purchases, there are specific cards for that as well.
Compare Annual Fees
Some credit cards do not have annual fees at all. But does it take away some form of rewards then? But then other credit cards have incredibly high yearly fees. Is the card worth it and can you afford it?
Pick a few different credit cards from different companies and start comparing them. Look at the annual fees and see which is the lowest without losing the rewards you want.
Compare Interest Rates
Credit cards are known for having outrageous interest rates. Even if you plan to pay the balance off in full each month, you should still compare the interest rates of each card you are looking at.
Watch out for the zero percent interest introductory period. Although it is enticing, if you rack up even a little bit of debt on the card, the interest rate eventually will skyrocket. Be sure to look at the regular interest rate as well. If it is hovering around the 15 percent, you may want to reconsider that card.
Ask Lots of Questions
Credit cards are a big decision that can have serious consequences. So do not be afraid to talk to a financial advisor about your choice. You should understand everything related to your future credit card, and how it can negatively affect you if you go into debt.
Also look for any hidden fees, late payments or another form of penalties the company does not advertise. Every little charge adds up over time.
So whether you are new to the credit card world, or need to replace your Chase credit card soon, use these points to help make your decision. When in doubt though, speak to a professional about finding the right credit card for you.