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Compare Credit Cards

Posted by: Staff Writer | May 22,2008

Comparing Credit Cards

The Internet has both made it a lot easier to sign up for a new credit card and a lot harder.  The reason it’s easier is that there are far more avenues to sign up for a credit card.  No longer do you have to wait for a credit card offer to arrive in the mail to sign up for a credit card.  You can just go to any number of sites to compare new credit card offers.  But that’s also where there’s a problem: there are dozens upon dozens of credit card offers available.  How can you sort this out?  

What you need to do first is narrow down your choices.  The three most important things you should look for are:

1.    Interest rate
2.    Fees
3.    Rewards program.  

What can be confusing is just how these three issues interrelate.  For example, a card with a low interest rate may have higher fees.  A card with a good rewards program may have a higher interest rate.  So which do you choose?  It all comes down to how you use the card.  

If you pay off the balance in full every month, as is most highly recommended, a good rewards program is your best bet, as you won’t have the bear the brunt of monthly interest payments.  However, the vast majority of cardholders do carry a balance month to month so a low annual percentage rate (APR) is key.  

It’s important to look to the APR first if you intend on carrying a balance.  Most fees on a card are enacted if you do something wrong – such as go over the limit or pay late – so these shouldn’t be factored in.  There are other fees attached to some cards, but even a sizable annual fee is not going to be a problem when compared to what you might spend on increased interest payments.  So look to interest rates first before factoring in fees. 

Rewards Programs

A number of cardholders look to rewards programs first.  It’s tough to make a blanket assessment about rewards programs because this will change according to the cardholder.  If you’re intent on building up airline miles then you should look into a frequent flyer rewards card.  There are a vast array of rewards cards available: cash back cards, bookstore cards, gas rebate cards, Disney store cards, and more. 

How to Compare Credit Cards

There are so many credit cards available it can be dificult to narrow them down.  As mentioned, your interest rate should be the main way that you compare different credit card offers.  The credit card search engine at Experts on Credit or a site like Lower My Bills can help you compare and contrast different credit card offers.  Here’s the process”

1.    Find a credit card in your credit rating range.  Don’t try to fool the system by inputting a better credit rating than you have because this will not work when the issuer enacts a complete credit check.  
2.    Narrow down your choices.  For example, if you want an airline miles rewards card, compare this type of card.  If the APR is paramount, compare cards in a similar range.  Comparing 5-10 cards is your best bet.  
3.    Now that you’ve narrowed down your choices, you can measure how these cards compare in terms of APR, fees, and rewards points.  Ideally, you want to find the card that has a healthy balance for all three criteria.  Credit card search engines make it easy to make side-by-side comparisons. 

Instant Approval Credit Cards

One easy way to apply for a credit card is through instant approval.  In instant approval credit card applications, the process takes into account everything mentioned above: credit rating, interest rate, rewards program, income, and other factors.  It’s a way to make quick comparisons between credit cards without having to make side by side comparisons.  Consider it a kind of automated comparison system.  

Again, you can’t fool the system by plugging in a higher income or credit rating because instant approval engines are designed to catch suck tricks.  In fact, if you try to trick the system, you could instead be offered a card with worse terms than if you plugged in accurate information.  Whenever making credit card comparisons, it’s important to be honest about your financial situation and what you hope to achieve with the card. 

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