Monday, April 12, 2010

Things to consider when choosing credit card

It seems that almost everywhere you look, there’s a different credit card being offered, with different rates and features. If you want to apply for a credit card in South Africa, there are many different options, and choosing the right credit card is important.

Don’t be overwhelmed by the number of cards out there. Because in fact, narrowing down your choice is not too tricky. Once you’ve separated the quality credit cards from the less desirable ones, you’ll be left with a few top options. Then, it’s just a case of choosing the one that offers the features and benefits you most want.

Need a little more advice? Read on to find out what to consider when choosing a credit card.

5 Things to consider when choosing a credit card

1) Who is the lender?
There are plenty of lenders who woo their customers with brightly-coloured cards or clever marketing tricks. But the design of the card should be the last thing on your mind! Choose a reputable, trusted lender. Ask around, and speak to your family and friends. When choosing a lender, you want the backing of a reliable, well-established company with a proven track record.

2) What is the interest rate?
The interest rate you pay on your credit card could make a significant difference to your instalments, particularly if you take some time to settle your outstanding balances. While the interest rate will also be influenced by your credit score, certain credit cards offer more competitive interest rates than others.

3) Are there rewards?
Not all credit cards offer rewards, and for some credit users, a straight-forward, classic credit card is the optimum choice – particularly for newer or younger cardholders. However, if you use your card frequently, and tend to settle outstanding balances promptly, consider a rewards credit card. For regular credit users, the rewards are significant – and even more so if you’re a prompt payer.

4) What are the credit card fees?
Every credit card has associated fees. There is usually an annual card fee, and there will also be fees for transactions, additional cards and replacements. Some credit cards may not have an annual fee, but the transaction fees could be very high – or the interest-free period could be shorter. Consider all these costs to find an affordable deal. Remember that the “cheapest” card may not necessarily be the best quality one.

5) Is there an interest-free period?
Some credit cards offer an interest-free period, and you won’t pay any interest on your outstanding balance when settled within this time. The length of the interest-free period varies from bank to bank, and for many cardholders, it’s vital in keeping credit card expenses down. If you’re a prompt payer, an interest-free period could help you to avoid paying credit card interest altogether.

Find the right credit card online
Use the credit card comparison tools online for even more help in finding the ideal credit card. Then apply online for the South African credit card of your choice.

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