We have used credit cards ourselves and looked at the various products that are on the market. We have come to the conclusion that different cards really do make sense for various people. This is based on what they want out of their cards. It is not always the lowest rate credit card that always makes sense for everyone. Some consumers really can utilize many of the benefits that come with credit cards.
Let’s face it, when you first get a credit card, you have good intentions. It will only be used for emergencies and for those times when you do not have the cash handy for you. You plan to always pay the balance in full every month to avoid interest charges on the unpaid balance. This was certainly our objective and plan when we got our first credit card. We were not even that interested in what the interest rate was because we had plans to always pay the unpaid balance every month.
Well, that seems to work 90% of the time. There are occasions when we just do not have the money and we need to carry a balance over the end of the month. Suddenly we are very aware of what that interest rate is and how important it is to pay it off as quickly as possible. This is what got us started looking at credit cards and what they cost. We also started including the benefits of the cards as well to see if that made a difference.
With all of the products that are available, we decided that it is better to get back to basics and focus on the lowest-cost credit cards. First of all, there should never be an annual fee for using the card. Secondly, you want to find a card with the absolute lowest interest rate just in case you do have an unpaid balance. This is really the best place to start. You will likely have a number of cards that fit this category.
Next, most consumers will want to now compare many of the benefits. Whether it is pointing towards airfare, goods that you can purchase, insurance for rental cars, insurance on things that you purchase, or health insurance while you travel, they all have value to some consumers. The situation with these cards is that there is usually a cost to these cards and now the big decision. Will you make sufficient use of these cards and the points to offset the additional cost of a card that offers benefits?
Based on my personal experience, we use all of the benefits that are listed in the previous paragraph, however unfortunately for us, we really do not use them often enough to make it worthwhile. If the added cost of the card with benefits is around $100, then you really need to make sure that you get $100 in benefits that you actually use every year. Some years we have received much more than that while in other years we do not even come close.
The bottom line for us is that the lowest-rate credit card is really a card that has the lowest rate and the benefits are free. Be prepared to spend some time shopping around to find the best deal for you.
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