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Do you have a credit card? Chances are, if you are above the age of 21 you probably have one or 2 of these financial tools in your pocket. However, the first step to credit card success is to compare credit cards to ensure that you choose the best offers. With credit cards being such an important part of the financial stability to consumers in the US, it is surprising to me that there are not more tutorials out there that give tips for comparing credit cards. Here are some tips to ensure that your credit card will be the lowest cost offer available to you.

Compare Credit Card Interest Rates

The first thing that you will need to compare when it comes to credit card offers is the interest rates on the account. It is important to remember that the interest rates on a credit card are how the lenders earn their money. Therefore, the higher the interest rate, the more money it will cost to you over time. Also, it is important to know that there are more than 1 type of interest on credit card accounts. The different types of interest will be different amounts charged to balances that were accumulated in different ways. Here is a list of the different types of credit card interest rates:

• Standard/Purchase Interest Rate: The first type of interest that you will most likely come across will be the standard interest rate. The standard interest rate is the rate of interest that will be charged to balances that were accumulated by way of standard purchases such as point of sale stores like Wal-Mart or gas stations.
• Introductory Interest Rate: The next type of interest rate that you will most likely come across is called an introductory or promotional interest rate. The introductory interest rate is a low short term interest rate that is used as a promotion to attract the attention of consumers. Once the introductory period expires, balances that are charged the introductory interest rate will then be charged the interest rate for the category of their accumulation.
• Cash Advance Interest Rates: The next type of interest rate would be the cash advance interest rate. Cash advance interest rates are generally one of the higher interest rates on the account. These interest rates are the rates that will be charged to balances accumulated through cash transactions such as A.T.M. withdraws and wire money transfers. It is in your best interest to stay away from using your credit card for these types of transactions whereas they can be quite costly.
• Default Interest Rates: The final type of interest that you will come across will be the type of interest that you never want to be charged. This is the default interest rate. The default interest rate is generally the highest interest rate on the card and for good reason. This is the amount of interest that all balances will be charged should you default in any way. Some examples of defaults are late payments and spending more than your credit limit. Although we never expect to have to pay this rate, it is important to at least know the rate your are agreeing to should you find yourself in this situation.

Now that you know the different types of interest rates and what they mean, it is important to ensure that you choose the card with the lowest interest rates for the reason that you plan to have a credit card.

Compare Credit Card Fees

Another thing that is very important to compare when looking at new credit card offers are the fees associated with these offers. In most cases, the interest rate will not be the only fee charged to the account. Generally, you will find that there are a few different types of fees. Here is  list of the general fees that are charged to credit card accounts:

• Balance Transfer Fees: One fee that you will find quite often is called the balance transfer fee. This is the fee that will be charged for the process of completing a balance transfer from one credit card to the new credit card. However, these fees are ONLY CHARGED IF YOU PROCESS A BALANCE TRANSFER.
• Annual Fees: Another fee that you will come across quite often when it comes to credit cards is annual fees. These fees are just that. They are simply fees that are charged to the credit card once a year for shear privileged of having the card. Generally, annual fees will be under $100 however, they can get pretty high on some credit card offers.
• Cash Advance Fee: The cash advance fee is much like the balance transfer fee. This will be a percentage that will be charged to each cash transaction aside from the interest rate. Cash advance fees are ONLY CHARGED IF YOU PROCESS A CASH ADVANCE!
• Foreign Transaction Fee: Another fee that is commonly charged on credit cards is called the foreign transaction fee. This fee represents the amount of money that will be charged to transactions that are outside of the continental United States. Generally, this charge will be a percentage of the transaction plus interest.

Grace Periods And Other Terms

Finally, when comparing credit card offers, it is important to compare things like grace periods and rewards. Grace periods are the amounts of time between the date of a transaction to the first date of interest charges. Also, some credit cards offer rewards programs and other perks. It is important to remember to compare all aspects of credit cards when it comes to comparing something as financially important as credit cards.

Editors Choice Credit Card Offers

Have a specific question that you would like answered? Simply leave a comment below or write me at Joshua@JEMCreditCards.com!