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Shopping for the Best Credit Card Deals in the U.S. - How do You Know It's the Best Deal?
Shopping for the Best Credit Card Deals in the U.S.
Looking for the best credit card deals in the U.S.? If so, you're probably like most people - the first things you look for are rebates, discounts, free travel miles, free gas, or cash back rewards. While there's nothing wrong with checking out cards that offer these perks, there are much more important things you should be checking on first to get the best U.S. credit card deals.
Here are some important features that all credit cards have and a brief explanation about what they are and why they're important.
Shop Around to Find the Best Credit Card Deals in the U.S.
CREDIT CARD RATES
Interest Rates - Interest rates are what the credit card company charges you for your purchase. The best credit card interest rate is around 9.99%. Of course, you always want to get a credit card with the lowest interest rate possible and this should be one of the first things you check, but you also need to know that there are two types of credit card interest rates - fixed and variable.
Fixed interest rates stay the same. If you apply for a credit card with a 9.99% interest rate, you can count on it staying at 9.99%. Some credit cards have variable interest rates that fluctuate with T-bill sales (I won't even try explaining that one).
If you apply for a credit card that shows the regular APR as 12.99% - 20.99%, this means that the credit card company can charge you anywhere from 12.99% to 20.99% on your credit card balance.
It's always best to try to get a fixed credit card rate. You'll have better control of your payments and know what to expect.
Annual Percentage Rate (APR) - The APR is the rate of interest that includes the interest and all fees for the year. Credit card companies are now required by law to quote this rate so you have something to compare credit cards by.
Interest Rate Calculations - Your credit card company will figure the interest you owe each month by multiplying your APR times your card balance. They then divide the interest they calculate by 12 for the 12 months in the year.
The tricky part is figuring out your balance. If you have unpaid charges on your credit card, your credit card company will figure your interest one of three ways - average daily balance, previous balance, or adjusted balance. The daily average balance is the most common method.
Know Your Credit Card Basics
CREDIT CARD FEES
Application Fees - Some credit card companies charge a fee when you apply for their credit card. This isn't very common - especially for unsecured credit cards. If you are applying for an unsecured credit card and you're asked to pay a fee, go somewhere else. You can do better.
Application fees, when charged, are usually for secured credit cards. Again, you can probably find secured credit cards that won't charge an application fee so look for them first. Be careful about paying application fees. If you don’t qualify for the card, you won't get your application fee back.
Over-Limit Fees - Over-limit fees are what you're charged when you max out your credit card. These fees normally range from $20 to $30 a pop. Be very careful about this. It's an easy way to waste money and it ruins your credit score.
Late Payment Fees - Late payment fees are another fee you can and should avoid. The credit card company charges this fee to you anytime you don’t make your credit card payment on time. The fee ranges from $20 to $30. Just like the over-charge fee, making late payments on your credit card will ruin your credit score.
Cash Advance Fees - Try to avoid using your credit card for cash advances at all costs. Not only will the credit card company charge a fee for taking a cash advance, they'll also charge interest on the money borrowed until you pay it back - a double whammy.
Miscellaneous Fees - Any fee not listed above gets put in this convenient little category. Don’t be misled by the title "Miscellaneous Fees". Just because they're miscellaneous, doesn’t mean some of them can't pack a punch. Read the fine print carefully to see what the credit card company is charging you in this category. This way, you won't have any surprises.
CREDIT CARD GRACE PERIOD
The best way to use a credit card is to charge an item and pay it off by the end of your credit card billing cycle. This way, you can rack up on your rebates or cash back rewards, but not pay any interest.
Knowing your grace period is important. It's the time after the billing date that you have to pay your bill without being charged interest. This means you're only paying for the purchase and not getting stuck with any extra fees. Paying within this grace period is a good strategy to using credit cards wisely.
CREDIT CARD REBATES
Credit card companies use rebates and other perks to lure you into taking their credit card. These rewards can be great, but be careful.
First, rebates are not to be confused with discounts. Rebates are a percentage refund on what you buy. Some credit cards tell you that you get 1% back on purchases. You do, but only if you spend a certain amount. Don’t spend extra so you can get a measly 1% back. You'll end up going in the hole and spending money you shouldn’t have spent in the first place.
Also, check to see if the rebates are something you'll really use. Do you get the rebates only if you buy at certain stores? If you only buy certain brands? If so, make sure you shop at these stores or buy those brands or the rebate is worthless. They sound good, but when you stop and think about them - not so much.
Use Credit Cards to Your Advantage
CREDIT CARD DISCOUNTS
Discounts reduce the amount of your credit card bill. These are worth shopping for but only if they don’t make you spend more than you would have normally.
Finding the Best Credit Card Deals in the U.S.
Finding the best credit cards with the best deals isn't that difficult, if you know what you're looking for. Just remember to look beyond the obvious perks and do your homework.
Read the fine print. This way you won't have any unpleasant surprises later or end up with a credit card that you won't really use. Carefully consider all these things as you shop for the best credit card deals in the U.S.