Choosing the Right Credit Card

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Credit cards enjoy tremendous popularity among people as a convenient payment method. From business customers to teenagers and retirees, everyone wants the benefits of carrying credit cards. When choosing a credit card, there are several aspects to consider: fees, interest rates, charges and benefits can vary greatly among credit card issuers.

Credit Cards Are Not Created Equal

Credit cards have the same shape and size, but they can have different terms and conditions. There are many types of credit cards, so anyone can find one that suits his or her individual needs. Which program works for you will depend on a number of factors that include:

  • age
  • credit score
  • income
  • amount of money needed
  • number of current credit cards
  • special interests

Credit cards are not issued only through banks such as Bank of America or Citi® Bank. There are many financial organizations that provide credit cards and other services. Novus, one of largest financial groups in the world, offers the Discover Card. American Express Financial Group offers the American Express Cards to its customers. Fees and interest rates vary from one financial group to another.

Which Credit Card Is Best for You?

Before choosing a credit card, ask yourself a few questions:

  • Why do you need a credit card? - The first step in choosing the right credit card is to determine your financial needs. This way you will know exactly what type of card you need, and you will be able to stay focused on this instead of being sidetracked by special deals that you don’t really need. You might need a business credit card just for business purposes or one with low interest rates. Some credit cards give you the chance to win membership rewards, airline miles or cash back.
  • How do you want to pay back the charges? - Evaluate your budget and decide whether you want to pay off your credit card monthly or just a percentage over each month. Some financial organizations allow customers to pay both ways.
  • How much do you need to charge at one time? - Business customers typically choose credit cards with very high or no spending limits. If you need a credit card only for emergencies or you want to build credit, look for credit cards with low spending limits.
  • Are you interested in special deals? - Numerous financial groups that issue credit cards offer membership benefits and special deals. Some of them give you free "stuff" or credit based on your card usage. Decide whether you want a rewards credit card or a standard one.

Be a Responsible Credit Card Owner

Even if you are a responsible credit card user, there is still the psychological aspect of overspending that must be considered. Studies indicate that people tend to spend more when using credit cards.

Most customers believe that paying off their credit cards in full each month makes them responsible credit card users. Even though this aspect is important, there are many other things that should be considered. It is important to know how the credit card process works and understand that a credit card is not free money. Responsible credit card users develop systems for managing their accounts.

A professional financial advisor can help you maintain control over your credit card and minimize increased spending due to convenience. If you are going to have a credit card, you should be responsible with it and pay your credit card statements in a timely manner.

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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.