There are many credit card products available on the market and not only are the banks offering these low interest rate credit cards, but also many other lesser known financial institutions. They offer everything from free debt transfer from other credit cards with no interest on this debt for the first 6 months to 1% interest on debt transfers. Once the initial period is up they all tend to raise their rates to their standard level which can be anywhere from 11.99% to 18 or 19% depending on the card. Some cards will have an annual fee while others will offer their products without an annual fee. They recover their costs in other ways by relaxing their offerings in other areas. There are so many credit cards on the market and it can be difficult to know which one to choose.
There are both short term advantages and long term advantages to all of these cards. Some are better than others and the consumer is faced with choosing a product that appears to be complex and has a variety of attractive options. We decided on a credit card which we will not mention in this post since we are not promoting any products. We looked at the all of these credit cards based on our life style, our spending habits, our short term needs and our long term needs. These were the four basic criteria that we used to make our decision. Readers may have other criteria that are more important for them. We will explain our rationale in more detail. We hope this helps readers with their own decisions regarding which card they use.
Life Style – our current life style is one in which we travel a lot. As a result a large credit limit is important as are the opportunity to collect points that can be used for travel. We also like the advantages of travel insurance, health insurance while we travel and travel cancellation insurance. Car rental insurance is another advantage for us as well. If you do not travel much or never, then you may not need a card with these advantages. You may want to evaluate your life style needs in the short term as well as the long term to help you select the correct card.
Spending habits – we charge everything to our credit card in an effort to maximize our points. We also like the idea of insurance on the things we buy, both in terms of replacement as well as extending the warranty of the item we purchase. We pay our credit card balance in full each month and do not carry a balance so we are not as concerned about interest rates, although having a low interest rate credit card would be an advantage for the few times we allow the balance to run over for the month.
Short Term Needs – our short term needs do not seem to vary much from our long term needs. However if we carried a balance on our credit card, the lowest interest rate card would be the best for us since it would minimize our interest payable. In a situation like this we would welcome the ability to transfer unpaid balances from other credit cards and pay no interest or a low interest rate on any of these transfers. Most of these credit cards only offer zero or low interest rate for a limited amount of time, so this is something to be aware of.
Long Term Needs – Over the long term most credit cards are pretty much the same except for interest rate and other advantages such as travel benefits and points. If the travel benefits are not important then the focus should really be on what interest rate you are going to pay for any unpaid balances. The lowest interest rate credit card over the long term is really the best product for us.
Many credit cards sound great especially when they are selling great offers for you to sign up. These can be significant advantages in the short term. Remember that they can impact your credit rating if you sign up for too many of them and they can be hard to keep track of if you have a lot of them. We like to stick with two basic credit cards with low rates and lots of travel benefits.