When you need a new pair of shoes, do you buy the first pair you find? You probably have certain things you are looking for in your new shoes, and you don't stop shopping until you find just what you need. When it comes time to shop for a credit card you need to keep these three important things in mind:
What is the annual percentage rate (APR)?
The annual percentage rate (APR) is the interest rate you must pay the credit card company each year for the use of borrowed money. This is the amount that will be charged if you do not pay your account off in full each month. When shopping for credit cards, you want to look for a low APR because this means you will be paying less interest per year on any credit card balance.
How long is the grace period?
The grace period is the amount of time the lender gives the cardholder until payments are due without charging interest. The average grace period is 24 days. This means that the cardholder has 24 days from the time the bill is printed until the payment is due. Interest is charged on any amount not paid during the grace period. When shopping for credit cards, you want to look for a grace period of at least 24 days.
What are the fees?
Many card companies charge an annual fee. This is in addition to interest charged each month on unpaid balances. If the annual fee is extensive, it can cancel out any savings you would get from a low APR. You want a card with a low annual fee, but you must also consider the APR when making your decision.
Don't get sucked in by ads that promise you a credit card no matter what your credit rating. If it seems too good to be true, it probably is. There are lots of scams out there to avoid. Be sure you're working with a reputable company when you begin to establish your credit history.