What Factors Should You Consider Before Applying for a Credit Card?
Filed Under (Credit Card Tips) by creditblogger on 07-10-2008
A credit card is a powerful if it is used the right way. Many credit card arbitrage masters know exactly how to get best out of each and every credit card they own. But you don’t have to be an expert to know what it takes to find the right credit card for your situation.
Many consumers apply for credit cards that come with a lot of cost savings features but do not tap into their cards’ potential. A good credit card is like a good car. If you don’t use it the right way, it is not going to benefit you the way it should.
Consumer credit card and business credit cards are very much different, and the thought process that goes behind choosing them is different as well. But, most consumer and business credit card holders choose one credit card over the other due to the following factors:
Annual Fee: a credit card with an annual fee is simply looked down upon by most consumers. Consumers simply do not like to have to pay a fee on an annual basis to have the right to own a credit card. What many consumers do not consider is the fact that credit cards with annual fees often come with more features and cost saving benefits. Business credit card holders are more open to the idea of paying an annual fee to business credit card issuers. So there is no wonder credit cards such as the Plum card are the most popular business credit cards on the market.
Balance Transfer: balance transfer features matter to both consumers and business owners. Credit cards that come with low balance transfer APR are almost as popular as cards that come with higher APR but no transfer fees. The standard balance transfer in the credit card industry is 3%. But there are minimum and maximum amounts that you could be charged, and those amounts differ among various credit card offers. At the end of the day, lower transfer rates are useful to people who are planning to transfer very high balances to their credit cards.
Introductory offers: credit card offers are very powerful in attracting and retaining card holders for quite a while. Chase, Advanta, American Express, and Discover all offer credit cards that come with introductory 0% APR for 6-15 months. Some cards only focus on purchase APR, while others focus on both balance transfer and purchase APRs. It is given that credit card companies may limit their introductory offers with the economy struggling badly, but introductory offers are still one of the most popular reasons people choose one credit card over another.
Life-Time benefits: there are a few brave men and women among us who stick with one or two credit cards for more than a couple of years. These folks choose their credit cards based on its life-time cost saving value. Credit cards that come with life-time balance transfer or purchase rates are very popular to this group.
At the end of the day, you need to know exactly what you want to accomplish with a card before applying for it. If you want to transfer large balances to your card, then you should go for one that comes with a low balance transfer APR rate. So there is no one credit card offer fits all on the market. But by doing your due diligence, you can make sure you find the credit card that is right for you.
