The Bare Minimum You Should Expect From A Credit Card
The days when a credit card was just a credit card are long gone.
The basic idea of a card, the ability to make purchases now while only actually paying for them at a later date, has been almost submerged under a huge range of extra features and benefits.
Balance transfers, cash back, rewards, 0% deals, charitable donations, affinity programs...
there's a lot to think about when applying for a new card these days.
However, if you're going to secure yourself a worthwhile deal on your next card, you need to avoid being blinded by all these extras, and to start your decision making process by concentrating on the bare minimum of features that you can expect to get with any card.
If a card gets these basics right, only then is it worth looking at any extras it might offer.
The first and most obvious feature to look at is the card's APR or interest rate, and the lower this is the better.
A good target to look for is an APR in the low to mid teens range - there's really no excuse for a card to charge 20% or more these days, unless there are adverse credit issues to take into account.
It's quite usual for a card which offers extensive benefits to have a slightly higher interest rate, but a great rewards program, for example, shouldn't excuse a rip off APR.
Next, you should make sure your card doesn't have an annual fee which you have to pay whether or not you actually use it.
Annual fees used to be very common, but now the only cards which generally feature them are some of the top-end platinum cards which offer VIP benefits to the cardholder, but only at a price.
Another thing to look at is the interest free 'grace period' of the card.
If you pay your statement in full and on time every month - that is, you don't carry a debt from one statement to the next - then you should be rewarded by not having to pay interest on your spending during this period.
The grace period should be long enough to ensure that by settling your debt you should avoid all interest charges completely, and in practice this means that it should be a minimum of 50 days.
The final thing to take note of is how much fraud and consumer protection your card offers.
It is the legal standard that you can't be held liable for any losses caused by fraudulent use of your card account, providing you haven't been negligent in any way, for example by giving your card details out inappropriately.
However, some card issuers take this further and offer active fraud prevention measures to help you avoid identity theft and other potential difficulties you could face through card misuse.
You should also expect to receive a good level of protection against problems such as non-delivery of online orders or being sold defective goods.
This, then, should be your starting point when comparing credit cards.
No matter how attractive some of the more glitzy features might appear, you can bet on it that if these underlying basics aren't up to scratch, then the offer you're being tempted with might well be a better deal for the issuing bank than for the customer.
The basic idea of a card, the ability to make purchases now while only actually paying for them at a later date, has been almost submerged under a huge range of extra features and benefits.
Balance transfers, cash back, rewards, 0% deals, charitable donations, affinity programs...
there's a lot to think about when applying for a new card these days.
However, if you're going to secure yourself a worthwhile deal on your next card, you need to avoid being blinded by all these extras, and to start your decision making process by concentrating on the bare minimum of features that you can expect to get with any card.
If a card gets these basics right, only then is it worth looking at any extras it might offer.
The first and most obvious feature to look at is the card's APR or interest rate, and the lower this is the better.
A good target to look for is an APR in the low to mid teens range - there's really no excuse for a card to charge 20% or more these days, unless there are adverse credit issues to take into account.
It's quite usual for a card which offers extensive benefits to have a slightly higher interest rate, but a great rewards program, for example, shouldn't excuse a rip off APR.
Next, you should make sure your card doesn't have an annual fee which you have to pay whether or not you actually use it.
Annual fees used to be very common, but now the only cards which generally feature them are some of the top-end platinum cards which offer VIP benefits to the cardholder, but only at a price.
Another thing to look at is the interest free 'grace period' of the card.
If you pay your statement in full and on time every month - that is, you don't carry a debt from one statement to the next - then you should be rewarded by not having to pay interest on your spending during this period.
The grace period should be long enough to ensure that by settling your debt you should avoid all interest charges completely, and in practice this means that it should be a minimum of 50 days.
The final thing to take note of is how much fraud and consumer protection your card offers.
It is the legal standard that you can't be held liable for any losses caused by fraudulent use of your card account, providing you haven't been negligent in any way, for example by giving your card details out inappropriately.
However, some card issuers take this further and offer active fraud prevention measures to help you avoid identity theft and other potential difficulties you could face through card misuse.
You should also expect to receive a good level of protection against problems such as non-delivery of online orders or being sold defective goods.
This, then, should be your starting point when comparing credit cards.
No matter how attractive some of the more glitzy features might appear, you can bet on it that if these underlying basics aren't up to scratch, then the offer you're being tempted with might well be a better deal for the issuing bank than for the customer.
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