Simply being offered a line of credit is not a good reason to choose that card. The reason is that credit cards can vary greatly from one another and you will want to choose a card that is a perfect for your life, your finances, and your needs. In order to assure that you make the most responsible decision regarding your credit, consider a credit card comparison. This cross-sectional analysis will allow you to see the features, benefits, and downfalls of each card and why it may or may not be the right fit for you. If you are not sure what to be looking for, the following are some of the aspects you should consider focusing on in this analysis.
One thing that you should evaluate in your credit card comparison are the fees associated with each card. Examine any costs associated with borrowing. There are several different fees that can be assessed to your card throughout your borrowing experience. First, there is the interest rate that comes with each. Interest rates are the standard rate on purchases or balances carried from month to month that are added to your debt total. These fees usually are assessed in percentages. For example, your monthly interest rate will be three percent of the account balance or four percent of what you borrow that month. Again, these are just general statements and your specific card will vary but the credit card interest rate is important to assess across different card options.
Some cards have annual fees that are assessed to them. These fees are not based upon the amount the individual borrowed. Instead, they are what the individual pays each year to own the card. Not all cards have these annual fees and others have very high amounts. It simply depends on the card and the card provider. Because of the importance of these fees, it is important that your credit card comparison takes these fees into account. The result is a better understanding of your potential card and what you may be looking at in the way of cost to own it.
Another important aspect of your credit card comparison should be the payment schedule. A payment schedule will be the means and ways in which you must pay your card back. Understand minimum payments, if the card has them, and what you will be expected to pay each month. These can vary greatly from card to card. Some may expect you to pay your balance in full if you borrow under a certain amount while others will have minimum payment options. Also, payments will need to be made in a timely manner but how timely can depend on the card itself. Most cards have monthly payments but others may have different payment schedule offerings. For that reason, be sure that you understand what you are going to be expected to payback and when on each of the cards that you are looking at. This is one of the most important aspects to review to protect yourself from a card that you cannot afford.
Last, but not least, you will want to assess the limits to the different cards in your credit card comparison. You will want to understand how much of a line of credit they are providing you. You may be eligible to borrow a little or they may extend a large line. It depends on several different factors and each card can assess these at a different rate or with a different formula. Be sure that your credit card comparison highlights these differences so that you know which card will serve your needs the best.