Factors To Consider When Choosing The Best Credit Card Provider

When choosing a credit card, there are numerous factors to consider. You will need to check out the various features of different credit cards. However, you will also need to consider your needs and requirements.

We talked to the experts, and here they provided some tips on how to choose the right credit card for you and which factors you need to consider.

Annual Percentage Rate

For the most part, the factor that most people take into the highest consideration when choosing a credit card provider is the APR or Annual Percentage Rate. When deciding on a credit card provider or credit product, you should aim to choose a card with an APR close to the national average or below, which was around 20% in the UK in 2020. However, the most important factor will vary between people and their financial circumstances. 

Other important factors to look out for are annual fees, introductory discounts/rates, rewards, and cashback, and perhaps most importantly, if you fear you may not be able to pay your credit card in full each month is the minimum repayment fee. This, along with your APR, will have a huge impact on how much you're paying each month but also how damaging becoming indebted on your credit card might be. 

Scott Nelson, CEO of MoneyNerd Ltd, provides advice for those struggling to pay debts and looking to improve their financial education.

Introductory Interest Rates

Choose a credit card provider that gives you a low-interest rate or none at all during your first year. You should also ensure that the amount increases at an acceptable rate over time. Taking a look at how long the interest rate lasts is important. 

Annual Fee: Certain credit card providers charge an annual fee for the use of their services. You will need to pay it together with your interest rate and your spendings. Make sure to find a provider with the most acceptable fees. 

Minimum Repayment

If you’re unable to pay for your balance within the set due date, you’ll have to repay the minimum amount each month. The ideal minimum repayment is generally around 3%; however, it can be higher.

Charges

Check the credit agreement and see what the other charges the credit card provider imposes. See how much they bill for services if you go over your credit limit, make late payments, or use your credit card abroad.

Loyalty Points

Figure out how many points you’ll rack up for the amount that you spend. You should also check what services or products you can purchase using said points. Make sure that the shops and items are what you’ll likely want or need.

Cashback

Determine how much money will be refunded to your card when you make a purchase. Check if the credit card provider will allow you to qualify for the cashback. Lastly, find out what are the requirements to enjoy them. 

Annual Percentage Rate (APR)

Calculate how much you’ll need to pay for borrowing the card, especially if you’re unable to pay your balance off every month. Compare the different APRs that every credit company offers.

Francis Locknear, Founder TheCostGuys.com

Aligns Best With Your Financial Goals And Needs

When choosing the best credit card provider, choose the one that aligns best with your financial goals and needs, not the one that is the most trendy to obtain these days. It is incredibly important that you maximize your opportunities with credit cards, as you can win big in the long run with the right card and the smartest purchases. 

Look at various cashback offers; if you shop at a specific location a lot or use a ton of gas in your commute, there are credit cards available that will save you money in this regard.

Ann Martin, Director of Operations of CreditDonkey

The Reward System Or Money-Back System

One of the biggest factors to consider when choosing the best credit card is the reward system or money-back system that they employ. Since online payments are the most common way to pay nowadays because no contact payment is encouraged, we are sure to use our credit cards often. Hence, we should know how many rewards we should get and how the computation is done so we consumers can identify how often they should use that. 

Another factor to consider is the amount of interest you should pay in case you can't pay everything on your bill. This is actually the most important factor to consider as some cards offer high rewards but also have high penalties for unpaid credit card bills. Hence, you should either pay everything on time or just get another card with lower interest rates. 

Scott Hasting, Co-Founder BetWorthy LLC

Fraud Protection Policy

A key factor to consider when choosing a good credit card provider is their policy on fraud protection. Due to the rise of ransomware, many businesses (especially small businesses) have been victims of cybercriminals using their credit cards to make illicit payments. Therefore, it’s important to ask your credit card provider about what their policy is regarding fraud protection. 

Arnold Long, General Ops Manager at Mr. Blue Plumbing

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