Comparing credit cards can be like comparing apples and oranges. They are both good but how do you know which one is best.
Deciding which credit card is best really depends on what's important to you and that depends on how you use the card.
So here are a few things you need to look at when deciding on the best card for you.
APR
Our current top ten credit cards have APRs ranging from 0% to 19.99%. If it were as simple as how much interest you are likely to pay then you would pick the low interest or 0% card right?
Well technically yes but if it comes with a very high annual fee or you need to earn $50000 a year to qualify for it because its a platinum card then its not that simple.
If you carry a balance APR is much more important and you might want to set yourself a maximum as a starting point when researching a new credit card.
But if you pay your bill outright every month then APR can be a bit further down your checklist when picking your card.
Annual Fee
Credit cards are all about give and take and generally what they give with one hand they take away with the other.
Annual fees are guaranteed income for credit card issuers so they usually come with the lower variable APR cards.
Our current top ten credit cards have annual fees ranging from no annual fee to $99 and as you might expect the higher the fee the lower the APR.
Paying a higher annual fee might be a necessity if you carry a balance on your card and need to take advantage of lower rates, but look carefully at the trade off and do a few sums on just how much interest you will save knocking 1%-2% off the APR.
Balance Transfer Rates
Credit card companies offer low balance transfer rates to attract interest paying customers and there are three things you need to look closely at:
The introductory rate: our current top ten cards have rates ranging from 0% to 4.99%.
How long it lasts: our current top ten are offering these rates for 3 to 12 months.
If you pay interest at the purchase rate, or the usually higher cash advance rate, on any unpaid balance transfer once the introductory period has expired.
A low balance transfer rate is an enticer but, with some great exceptions, lower rates are for a shorter time period.
Be honest about the likelihood of paying the balance off in that time because the low rate savings will quickly evaporate if a cash advance rate kicks in on unpaid balances when the introductory rate has expired.
A bit of upfront thinking about what you need from your credit card could save you a lot of time and money down the track.