Interest rates are one of the most important factor of a credit card and should never be overlooked. Credit card charges at least three different types of revolving credit rates or interest rates as they are more popularly called. The regular interest rate is charged by credit card issuers on regular purchases made with the credit card. Sometimes, credit card issuers give a 0% Introductory offer on their interest rates, for a certain duration like 0% Intro Interest for 6months to attract new customers. As soon as this introductory rate period is over the regular interest rate sets in. If a credit card holder doesn't default and make late payments the regular Interest Rate is what he should be most concerned with. Other things being equal, a credit card with low regular APR is definitely the better choice. Some people always make sure that they pay their credit card at the end of the month - in that case, you can worry less about the interest rate but a lower interest rate is any day a better choice.
Annual Fee
Some credit card companies charge an annual fee for using their credit cards and associated services. Starting from Rs..500 this annual fees can go up to thousands per annum depending on the status of credit card. Regular, classic and silver credit cards have low or no annual fees as compared to gold, titanium, platinum or signature credit cards. Credit cards with annual fees increase the total ownership cost of the credit card hence as a money saving option, the credit card with a 0 annual fee offer is a good one, if it scores equal on other parameters. Also, credit card companies give options like a one time fee to replace the annual fee or waive off the annual fee for the first year. Always ask for these waivers from the issuer.
Credit Limit
The credit limit is the maximum amount of money one can spend on his credit card. The higher the credit limit the more purchasing power it brings for a credit card holder. Credit limit given to a credit card holder depends on his repayment capacity and the status of credit card which he is applying for. Generally signature, platinum, titanium and gold credit cards have higher credit limits than silver, classic and regular credit cards. All other factors being same one should go for a credit card which gives a higher credit limit. Also you can get your credit card limit increased after a few months of usage by calling the bank.
Finance Charges
Credit card companies charge various fees, penalties, and charges which are clubbed together in a category called finance charges. These charges increase the cost of credit card ownership. Care should be taken to get complete details about the Credit card finance charges and then a judicious comparison should be made so as to arrive on a credit card which pinches least in terms of finance charges. The lower the finance charges the better it will be for the credit card holder.
Grace Period
Grace period is the time from the end of a credit card billing cycle, in which a credit card holder can pay his monthly outstanding balances in full without attracting any interest on it. Grace period allows you more time to pay your monthly credit card bills. Credit card companies offer grace period from 20 days to 50 days or more. The credit card with a longer grace periods are good provided they are competitive in other comparison areas.
Balance transfer
Credit card balance transfers are a good way to save money on outstanding balance interest rates. Transfering a balance from a high interest rate credit card to another credit card will yield benefits only when the credit card is having a balance transfer interest rate lower than the regular interest of the pervious credit card. The ideal situation is to have a balance transfer interest of 0%. Secondly, this balance transfer period should be relatively long. For example a credit card with 0% balance transfer for 12 months is definitely better with a credit card with 0% balance transfer interest for 6 months, as it brings an additional 6 months of interest free period on balance transfer.
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