Credit Card Comparison.
What kind of credit card should you get? A green one or a gold one? One with a photo of a mountain or a painting of a lake? What interest rate? What rewards? Miles? Cash? Points? Seasonal specials? Plastic or -- the latest thing -- metal cards? It seems like every day, there's a new card that is trying out a new feature just so that it can be different from every other card that has come before. With all these different cards, how do you choose?
Should you care more about interest rates than annual fees? Or the other way around? Is it worth paying a higher interest rate if you get better rewards?
So many choices! You could go nuts trying to compare every single feature in every single card. That's where we come in. Here at Loanry.com, we make it easy to go shopping for a new credit card. Our sophisticated system makes it a snap to compare different cards and find out which one would be best for you.
There's no need to fear missing out! We will find a great card for you.
How do we do it? We ask you some simple questions. That give us the information we need to find the cards that have the best combination of features that will benefit you the most.
Credit cards have become an important part of daily life. Why not find one that will make you happy?
If you always pay off your entire balance, congratulations! You are saving money because you never have to pay interest on your card. The credit card companies probably hate you because they make their money charging interest. But people who promote smart personal finance strategies are cheering you on.
If this is you, when you go shopping for a card, you don't have to worry about the interest rates. You would benefit from a card that has other features you like, such as a great rewards program, even if it comes with a high interest rate.
On the other hand, if you sometimes or always carry a balance, then interest rates become very important. If that's you, don't be seduced by attractive rewards. You are better off with a low interest rate than with rewards. That's because for people who don't pay their bills off every month, the amount they pay in interest will be higher than the amount they get back in rewards programs.
Bottom line: If you always pay off your entire balance (and be honest with yourself here), then ignore interest rates. If you do carry a balance over from month to month, then your first priority should be a card with a low interest rate.
As we just saw, if you pay off your bill in full, you can focus on rewards programs when shopping for a credit card.
Which rewards are best for you?
Branded cards: Cards issued by a store usually give you special discounts or rewards when you use your card to shop at that store. Same deal for cards issued by restaurants, gas stations, and pretty much any business that operates as a chain.
These cards often also give you points for purchases made outside the store, at a lower rate. But the main benefit of using a store-branded card over, say, a bank card that also gives you points is the benefit you get inside the store itself (or restaurant, etc.)
How valuable the card will be to you depends on how much you spend in the store and how good the reward offers are. For frequent shoppers, the offers can be attractive. In addition to points, you might get invited to special sales and receive other perks as well. It varies a lot from business to business, so definitely check out the fine print.
One thing to watch out for with store-brand cards are the interest rates, which tend to be higher than the interest rates for bank cards. If you don't plan to pay off your entire balance every month, you may be better off with a card that has a lower interest rate.
Airline mileage: Airline mileage cards used to be very popular. However, they are not as valuable as they used to be for leisure flyers. Airlines used to award points based on how many miles you've flown. Now, some airlines award points based instead on the money spent on tickets. This favors a business traveler taking frequent short flights in business class over vacation travelers flying cross-country in coach at bargain rates. Also, as planes get more crowded, it's getting harder to redeem awards than it used to be.
Infrequent fliers might do better by getting a card with cash back rewards, instead of mileage rewards, and using the cash to buy airline tickets themselves.
Cash back: Cash -- now that's something you can use! Many credit cards talk about their cash back reward programs in terms of points -- typically 1 point for every $100 you spend. That's the same as saying you get 1% of the money you spent back.
Different cards have different cash back offers. Some offer more points for purchases at gas stations, grocery stores, drug stores, restaurants, or on travel. Some have tiered programs that pay you a higher rate the more you charge in a year. Some have special cash back offers that change every three months. When you shop for a credit card at Loanry.com, we will help you compare these different features.
Interest rate: Usually, if you tend to carry a balance, getting a low interest rate should be your top priority.
Introductory interest rates: Credit cards often offer a special low interest rate for new card holders, which can be as low as 0%. These intro rates always expire after a set period, typically a year. The interest at that point will go up to whatever the regular interest rate is on your card.
This can be a good deal if you have the discipline to pay off your balance before the introductory rates expire. Keep in mind, though, that these deals usually include an upfront transaction fee. That means that even a 0% interest offer usually isn't really a totally free loan.
Cards with low introductory rate can also be useful if you are carrying a balance on another card with a higher interest rate. By transferring the balance to your new card, you can save money on interest payments while the introductory period is still in effect.
Annual fees for credit cards used to be more common, but not any more. You don't have to pay an annual fee to get a credit card these days as long as your credit history is fairly good. Some cards still charge annual fees, though. These cards usually offer special rewards programs, such as mileage programs, or they may have other benefits.
When shopping for a credit card, if you see one with a fee, ask yourself what you would be getting with that card that you couldn't get from a free card. Then ask yourself if what you get is worth the cost of the fee.
Some cards that have high annual fees have become strangely popular because they have unusual perks. Cards with a metal core, which make a "plunk" sound when you put them down on a counter, have a fan base whose passion rivals those who line up outside Apple stores in the middle of the night. Other expensive credit cards have high-status rewards such as private dinners in trendy restaurants. Fans of these cards go into a frenzy on social media when new cards get released, which makes the cards seem even more desirable to their online friends and followers.
Only you can decide whether you want to pay hundreds of dollars per year to make your card go "plunk."
The interest rate and credit limit you get when you first receive your card won't necessarily last forever. Unfortunately, these features aren't promises etched in stone. If you miss a payment, the issuer might raise your interest rate or lower your credit limit -- or both.
You can also expect that your interest rate may go up if interest rates rise in the economy as a whole, even if you always pay on time. That's a drag, but it's nothing personal.
This can work the other way too. If you have a good payment record, card issuers may raise your credit limit. They may not even notify you. You might just notice one day, when looking at your bill, that your limit has gone up.
Issuers don't typically lower interest rates spontaneously for customers. Sometimes, if you have a great track record with the card, you may be able to call up the issuer and negotiate a lower rate. There's no guarantee though. Sometimes that will work, and sometimes it won't.
It's never a good idea to miss a credit payment. Some cards, though, will penalize you more than others. If you always pay your credit card bill on time, you don't have to worry about this. If you have a habit of missing payments, then when you are shopping for a new card, you should look at the penalties. Avoid cards that will jack up your interest payments to some astronomic rate, say over 20 percent, if you miss a single payment.
If you do miss a payment, one thing you can do to try to avoid a penalty is to call the credit company and say you are sorry, and so on. Surprisingly, this works sometimes, though usually you can't get away with it more than once or twice.
Even better, resolve to change your late-paying ways and enjoy the lowered stress that comes with paying your credit card bills on time. An easy way to do this is to set up an auto-payment plan so that you don't have to remember to pay your bill.
Most credit cards in the U.S., whether issued by a bank or a store, are either Visa or MasterCard. For most consumers, there is no significant difference between the two. When you are shopping for a new card, you don't need to pay attention to whether it is Visa or MasterCard.
There are also some smaller issuers, including Discover and American Express. These may have special benefits, so they are worth checking out. But the cards are not always accepted everywhere that Visa and MasterCard are accepted. So if you are getting your first credit card, you might want to get one of the big two, so you can be sure you will be able to use it everywhere that takes credit cards.