Archive for October, 2009

Comparing Credit Cards

When there are so many credit cards on offer all claiming to be the best, comparing credit cards can seem like a scary task. Where to begin?

It will help a lot if you first figure out the reason for obtaining a card before you start doing credit card comparison. You must be honest with yourself about this, because the best credit card for you is the card that matches your needs. You can now use these to check how well each card meets your needs.

In looking for the best credit card deals, these things should be considered:

Interest rate. Check the monthly interest rate and charges. Pay close attention to the default interest rate — the rate imposed when payments are late and credit limits are exceeded. This is higher than the nominal interest rate or APR.

The Balance calculation method. If you intend to carry a balance, make sure you understand the card issuer’s manner of computing the balances on which interest will be charged. The methods that produce the lowest interest are the adjusted balance and average daily balance excluding new purchases.

Balance transfer opportunities. Offers of very low introductory rate for a specified period are intended to entice you to transfer balances from a competing credit card. Once the offer period ends the interest rate normally reverts to a much higher rate so check this. Using a credit card comparison website allows you to sort cards by interest rates.

Annual fee. Amounts charged for annual fees can vary hugely. Be zealous in your credit card comparison to look for the least fee. To be competitive, there are many cards that do not charge any annual fee but the trade-off might be in higher interest rate, so check carefully.

Cashback. Some cards offer cashbacks, varying from 1% to 3%, on your purchases. This does give you a welcome discount but if your plan is to carry a balance, the 1% discount will mean nothing compared to the 14% interest on your outstanding balance.

Late payments and other fees. If your payment comes in late, even for just one day after the due date, you’ll get hit with late payment fee. If you break a card rule then their are often other fees imposed. Credit card comparison is very important to look for the cards with the lowest penalty rates, over-limit fees, and other fees.

Rewards. The best credit card rewards programs require the least number of points to redeem the item you want. Aim for a card that gives bonus rewards at stores where you already shop the most.

Credit limit. Check how much credit will be allotted to you. Credit card comparison is needed against the amount of purchases you expect to charge to the card on a regular basis. You don’t want to be exceeding the credit limit. Look for a credit limit that’s about three times your expected amount of monthly purchases.

Foreign transaction charges. If you travel a lot and expect to use the card a lot overseas, check out and compare the applicable fees for foreign transactions and foreign exchange differentials.

Charges for ATM cash advances. Interest rates and transaction fees for cash advances are usually much higher than normal purchase transactions. Making cash advances should be avoided but it’s worth checking the fees in case you ever have to use it.

This article by Richard from compareyourbank.com.au who compare products including Woolworths credit cards.

Popularity: 14% [?]

Qualifying for Zero Interest Credit Card

Generally, if you want a credit card company to give you a zero interest credit card, you have to have really good credit. But if you do meet the qualifications, you can save hundreds, or thousands, of dollars on  your credit card payments.

A zero interest credit cards is particularly beneficial if it lets carry-over part or the entirety of your debt from another of your interest bearing credit cards to them. For instance, if you presently hold a 00 balance on one of your credit cards with an annual interest rate of 12 percent. So every month you are giving about twenty dollars a month in interest to the credit card company. By transferring this debt to a card that charges you no interest, you have essentially saved yourself twenty dollars a month.

It was only a few years ago that you could easily find zero interest credit card offers with introductory periods of a year or more. But these offers have been getting harder and harder to find. In addition, different credit card companies have various definitions as to what “zero interest” really means.

To some companies, zero interest means that the company will bill you zero interest on any thing that you charge during the introductory period. To others, 0 interest will mean that they will not charge you interest on any credit card balance that you transferred to them during the introductory period. To other companies, it can mean both, neither,  or something else completely. To find out exactly what your zero interest credit card offer is refers to, there’s no alternative to reading the fine print in the credit card application.

So where do you find no interest credit card offers? For one thing, just about every credit card company has an Internet presence today. The easiest way to start is to start our favorite browser and type something like “zero interest credit card offers” into it’s search engine. This will provide you with a great starting point for seeing what the marketplace is currently offering.

The second thing that you can do is to go to one of the many sites that rate and compare credit card offerings.  Web sites like “CreditCards.com” and “CardRatings.com” offer convenient, one-stop comparison web sites where you can easily look at a number of different offers simultaneously.

As an alternative option you can call your current credit card company and ask them if they’ll either offer you a credit card with zero percent interest or at least lower your current interest rate. If you have good credit, they may be happy to offer you such a deal to avoid the prospect of losing you to one of their competitors.

The genuinely good thing about having a zero interest credit card is that it lets you take advantage of deals that you come across. If you’re able to pay off your credit card balance before the introductory zero interest disappears, you’ve fundamentally gotten an interest free loan for the purchase of something that you may have purchased anyway.

And this is why, ultimately, zero interest credit cards are primarily useful for individuals who know how to set a budget and handle finances.

Popularity: 12% [?]