Finding the Right Credit Card for You

When it comes to credit cards, it's definitely not "one size fits all." As a smart consumer, you should select the card best suited for your spending and payment habits.

Before signing up for the first low-rate offer that comes your way, shop around. Maybe that great rate only lasts six months or the annual fee eats up any savings you could enjoy from the low introductory rate.

Do a little comparison shopping and you might find a card with the same rate for at least a year or another card with the same deal but no annual fee.

You can find lists of credit card plans, rates and terms on the Internet, in personal finance magazines and in newspapers. You’ll need to get the most recent information directly from the credit card company--by phoning the company, looking on the company’s web site or reading a solicitation or application.

If you've had your card for a while, shop around again because now there may be a new deal with the same card company, or a different, better arrangement out there with another card company that wants your business.

Cards may come with either a fixed rate or a variable rate of interest.

The first step in choosing a credit card is thinking about how you will use it.

• If you expect to always pay your monthly bill in full--and other features such as frequent flyer miles don’t interest you--your best choice may be a card that has no annual fee and offers a longer grace period.
• If you sometimes carry over a balance from month to month, you may be more interested in a card that carries a lower interest rate (stated as an annual percentage rate, or APR).
• If you expect to use your card to get cash advances, you’ll want to look for a card that carries a lower APR and lower fees on cash advances. Some cards charge a higher APR for cash advances than for purchases.