You've Likely Received A Lot of Credit Card Offer, But Which Is Best?

• Author: Jacob Greene
• Posted: 2024-08-01

In modern society, credit cards are pretty much ubiquitous. Almost everyone gets credit card offers in the mail on a monthly, sometimes weekly, basis.

While many of these offers are loaded with bold language proclaiming that they're one of the best cards you can get your hands on, that's rarely actually the case. This begs the question: which credit cards are actually good?

What Are The Features You Should Be Looking At?

Every credit card is going to be different, with varying lists of highlighted features and benefits. When considering which card to go with, or if you even want to even get one at all, there are a few key elements to focus on.

APR

APR, or annual percentage rate, is the percentage of interest placed on your credit card balance. A good example of APR is if, for instance, you have an outstanding balance of $1000 (money you'll need to pay the credit card company) and you have an APR of 25%, you'll need to pay $250 in interest over the course of a year. The way APR works in practice can get a little more complicated, since factors like changing balances and minimum payments can impact the amount of interest payed over time, but the previous example is basically how it works.

Obviously, a lower APR is better than a higher one in general as it means you'll pay less interest on your balance, but there are some other considerations that are important to take into account.

To begin with, if you always pay down your balance every month, the APR is essentially irrelevant as you won't be paying interest to begin with. Lower APRs are also often accompanied by a lack of special features or incentives as they're usually less profitable for credit card companies than higher APRs.

Perhaps the biggest thing to be on the lookout for when it comes to APRs is interest free-periods. It's actually pretty common for credit card companies to offer 6, 12, or even 18 month grace periods at the beginning of credit card terms where no interest is placed on purchases (0% APR). Depending on how you plan to use your credit card, this significant amount of breathing room could prove very useful.

Perks And Cashback Options

Many credit cards focus on not only the rate of interest you pay on your balance, but also additional benefits of using cards for specific purchases.

It's common for major companies, such as Home Depot or Target, to offer credit cards that allow for significant savings when purchasing items at their stores. Similarly, there are certain credit cards that offer cash back for certain types of everyday purchases, usually with cashback benefits in the lower single-digit percentage ranges.

Depending on your spending habits and if you spend a disproportionate amount of money at particular retailers, you could see some decent savings over time, even with high APRs.

Deceptive Features

Credit cards are notorious for having incredibly intricate legal agreements that can catch people off-guard who didn't read the fine print.

While there are countless ways in which you can be subject to incredibly unfair conditions, something that's worth double checking every time is hidden fees and massive APR changes. Some cards might appear to have really decent APRs from the outset, but can potentially double if you accidentally miss a monthly payment. Additionally, fees can add up quick and can add substantial sums to an already massive balance, which is why you should always be vigilant of credit card penalties, late fees especially.

Which Card Would Be A Right Fit For You?

Ideally, every credit card offer would be highly transparent, have a low APR, come with minimal fees, and provide discounts on all sorts of purchases. Unfortunately, it's rarely the case that all these things are present, so you'll have to pick and choose what you get access to.

If you have excellent credit, it's likely that you'll probably get bombarded with a large number of favorable options. If your credit isn't so great though, you're not going to be spoiled for choice. This doesn't mean you can't get your hands on a good card, but it does increase the likelihood that you'll be offered cards that are deceptively designed to look good, but actually aren't, or that have pretty bad APRs.

Exactly which card you get is going to depend heavily on your individual needs and finances, but if you search enough and if used correctly, it's more than likely you'll get a credit card that eases your financial situation.