Credit Card Comparison Shopping: Key Features to Look For | Credit 101 Ep. 186

When comparing credit cards, it’s important to evaluate various features to find the one that best suits your financial needs and lifestyle. Here are the key features to look for:

1. Interest Rates (APR)

• Variable vs. Fixed APR: Understand whether the APR is variable (can change with market rates) or fixed (remains the same).
• Introductory Rates: Look for cards offering low or 0% introductory APR for purchases or balance transfers.
• Regular APR: Check the regular APR that applies after any introductory period ends.

2. Fees

• Annual Fee: Some cards charge an annual fee; evaluate if the benefits outweigh this cost.
• Balance Transfer Fee: Typically a percentage of the amount transferred, which can add up.
• Late Payment Fee: Know the fee for making payments after the due date.
• Foreign Transaction Fee: Important if you travel internationally; some cards offer no foreign transaction fees.
• Cash Advance Fee: Fee for withdrawing cash, usually higher than the regular APR.

3. Rewards Programs

• Cash Back: Earn a percentage of your spending back as cash rewards.
• Travel Rewards: Points or miles that can be redeemed for travel-related expenses.
• Points: Earn points for every dollar spent, redeemable for various products, services, or experiences.
• Rotating Categories: Some cards offer higher rewards for specific categories that change quarterly.

4. Sign-Up Bonuses

• Bonus Points/Miles: Earn a large number of points or miles after spending a certain amount within the first few months.
• Cash Back: Get a cash bonus after meeting spending requirements.

5. Credit Limit

• Initial Limit: The amount of credit initially available to you.
• Potential for Increase: Some cards offer automatic credit limit increases with responsible use.

6. Additional Benefits

• Purchase Protection: Coverage for stolen or damaged items bought with the card.
• Extended Warranty: Extends the manufacturer’s warranty on purchases.
• Travel Insurance: Coverage for trip cancellations, lost luggage, or travel accidents.
• Rental Car Insurance: Secondary or primary insurance for rental cars.
• Price Protection: Refund the difference if a purchased item’s price drops within a certain period.
• Concierge Services: Access to personal assistants for travel, dining, and entertainment planning.

7. Redemption Options

• Ease of Redemption: How simple it is to redeem rewards.
• Flexibility: Availability of multiple redemption options (e.g., cash back, travel, gift cards).
• Minimum Redemption Requirements: Some cards require a minimum amount before you can redeem rewards.

8. Credit Score Requirements

• Eligibility: Understand the credit score needed to qualify for the card.
• Impact on Credit: Know how applying for the card will affect your credit score.

9. Customer Service

• Accessibility: 24/7 customer service availability.
• Reputation: Look for reviews on customer service experiences.

10. Security Features

• Fraud Protection: Zero-liability protection for unauthorized transactions.
• Alerts: Real-time alerts for suspicious activity.
• EMV Chip Technology: Enhanced security for in-person transactions.

Conclusion

By carefully comparing these key features, you can find a credit card that aligns with your financial goals and lifestyle. Remember to read the fine print and understand all the terms and conditions before applying for a new card.