How to Compare Credit Cards

Nearly everyone knows the joy of credit card ownership. Credit cards are an easy, fast, and safe way to make purchases. All it takes is a swipe and a signature and voila! the purchase is made. But, which credit card is the best? Is there really such a difference between credit cards? How do I compare credit cards and what are some factors to consider? Aren't they all really just the same anyway?

The answer to that last question is "No." There is a variety of cards to choose from in the marketplace including, balance transfer, reward, airline, cash back, instant approval, business, student, and low interest credit cards when choosing a card here at CreditCardAssist.com. Credit cards are just as varied as the banks that issue them. In fact, even credit cards offered by the same bank can have different characteristics - including both perks and drawbacks. Finding the right card does require a little research and an understanding of your lifestyle. With this knowledge in hand, you can find the card that is right for you.

Balance Transfer Credit Cards

One type of credit card is the balance transfer credit card. Balance transfer credit cards are those that are ideal for moving a high interest card balance from one credit card to another with a lower interest rate. Generally speaking, cardholders make this move in order to save on finance charges. Therefore, at the very least, to be considered a balance transfer credit card, it should have a lower APR than your current card. In addition, there should be no fees associated with transferring the balance.

The APR of a credit card can come in two main forms: fixed or variable. The APR, or annual percentage rate, determines how much you will need to pay toward finance charges each month if you do not pay off your balance. The higher the APR, the more finance charges you will have to pay. A card with a variable APR may be low at first, but the APR will fluctuate during the life of the card. Generally, it changes in response to the Prime Rate.

A card with a fixed low APR, however, will never increase unless otherwise stated. Often, balance transfer cards will offer introductory fixed rates - even 0.00% - but the rate will become variable after the introductory period is complete. This introductory period generally ranges anywhere from three months to one year. Some credit cards offer a fixed APR after the introductory period, as well, but this fixed rate will be higher than the introductory offer. Sometimes, cheap credit cards with a lower APR do have an annual fee, which is a fee that must be paid once per year in order to keep the credit card account open.

Reward Credit Cards

Some credit cards also offer rewards to their users. Some of the best reward credit cards include airline credit cards and cash back credit cards.  Yet others give the cardholders access to other rewards, such as gift certificates to restaurants or merchants for goods and services. Many times, rewards programs also have an annual fee. This is not, however, always the case. In fact, many of the best cash back credit cards do not have an annual fee. The long-term payout of these credit cards, however, can be well worth the annual fee. Reward credit cards also sometimes have a higher than average APR, though many still offer a low introductory rate and the higher APR is not a problem for those that do not intend to carry a balance on their credit card.

Credit Cards for College Students

Some credit cards are created specifically with college students in mind. These credit cards typically require little or no credit history in order to be obtained. Sometimes, these cards do have application fees and other costs associated with them. These cards can, however, go a long way toward establishing a student's credit history. Some of these cards are called secured credit cards. This means the student, or the student's parents, needs to send money to the credit card ahead of time. All of the money the student spends, therefore, is not borrowed. Rather, the money is just placed in safekeeping for the student to use. Instant approval credit cards are also attractive to college students because they do not require a credit history check. These cards can also help build a nonexistent credit history. Not all of these cards report to credit bureaus, however, so it is important to watch for this if the intent of the card is to help build credit history.

Business Credit Cards

Many business owners choose to apply for a business credit card. Often, these credit cards can be created to include the company logo, which adds to the professionalism of the company. In addition, a business credit card helps the business owner keep track of his or her business expenses. When looking to compare business credit cards, it is important to take several things into consideration. For example, will the expenses be paid at the end of each billing cycle, or will there be a need to carry a balance on the card?

Either way, the business owner needs to consider the card's Grace Period. A grace period is a set amount of time after purchases are made with the credit card during which the cardholder is free from paying finance charges. If the borrowed amount is paid within the grace period, no finance charges will be added to the account. A business owner may also want to watch out for cash advance fees. Most credit cards allow cardholders to withdraw money with their credit card, but convenience fees do apply. A business owner looking to have a credit card with which he or she can withdraw cash needs to find a card with no cash advance fee, or at least with a very small fee.

Other Features and Benefits

In addition to specializing in certain services, the added benefits also vary from card to card. These benefits may include purchase protection and extended warranties. Or, car rental insurance and travel insurance may be included in the card. Some cards even provide automatic discounts when they are used with participating merchants and retailers. All of these features also need to be taken into consideration when looking for a credit card, whether it is an airline credit card, business credit card, or a card for college students.