What to Look for When Looking at Credit Cards

Interest Rates

One of the most important items to look at when presented with a credit card offer is the interest rate. Interest rates vary based on your credit history and score. The better your credit score, the lower your interest rate. However, having a poor credit score doesn't mean settling for the first interest rate you receive. According to the Motley Fool website, bad credit interest rates can be 20 percent and up, but choosing the lowest interest rate can still save you hundreds of dollars each year if you maintain a balance.

Low Fees

Annual fees can sometimes earn you a low interest rate, but do the math before making a commitment. The best interest rate can be offset by excessive fees. Besides annual fees, check penalty fees such as late fees and fees on transferred balances. Avoid credit card offers that contain high penalty fees and, when possible, choose a card with no annual fee.

Perks

Some credit cards come with a range of perks. Themed cards such as travel or entertainment credit cards provide points each time you use your card. Points add up to free airline tickets, prizes or cash back. Look for an incentive card that offers perks you can actually use. If you rarely dine out, signing up a for a card that offers restaurant discounts may be a waste of time when you have access to cards with incentives that will improve your lifestyle.

Grace Period

Responsible credit card users pay their balance in full each month. If you fall into this category, choosing a card with an adequate grace period can mean paying no interest each month. The grace period is the amount of time you have before interest is applied to your balance. The CARD Act of 2009 mandates a minimum 21-day grace period

Considerations

Credit cards can help you manage your money if you choose the right card. Having poor credit is no excuse for settling for the highest interest rate and unreasonable fees unless you are prepared to spend cash to get credit. With credit cards for bad credit, fees are usually applied before you receive the card which means paying the balance before you can make any charges. For example, service fees and annual fees are due in full once your credit application is approved. Having good credit simplifies the credit card shopping process. Maintain a low balance and make timely payments each month to ensure your score increases each month.