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Choosing the right credit card
Choosing the right credit card for you can be as difficult as selecting the most appropriate person to share your life with. There are compromises to be made, benefits and drawbacks to be considered and, most of all, what they will bring to the quality of your life.
Despite the recent banking crisis and the ensuing recession, there are many card providers who are keen to get their cards into your hands. The most choice is to those with the best credit history and personal circumstances since these will have the best credit scores and, in the eyes of the providers, the lowest risk of default. However, if you have a damaged credit history, due to missed payments on loans for example, then there is a card out there for you. The drawback here will be that the credit limits will be low and the charge rates on any unpaid balance high (around 35 – 60% APR). These cards, provided by Aqua and Vanquish amongst others, can help you to rebuild your credit profile and earn back the opportunity to apply for the better cards.
Better is, of course, a subjective term since it is only in your eye`s that the benefits or otherwise of differing cards can truly be compared. Therefore, what may be right for you may not be the optimal choice for someone else.
First of all, if you already have a credit or store card and are looking to transfer the balance to another company to benefit from one of the many low rate offers, then there is plenty of choice. The trade off here will be between the low, or free, rate periods versus the fee charged for the transfer. Some will charge no fee but a lower rate of interest (such as Capital Ones` Low Rate BT with no fee but a rate of 9.9% fixed until August 2012) versus interest free periods of between 6 months (Virgin Atlantic Card) and 16 months (Virgin Credit Card). Here the fee`s range from 2% to 3% of the balance being transferred. Each of these may also come with an introductory period where no interest will be charged on new purchases. Both the Virgin Credit Card and the Halifax Credit Card currently offer a 3 and 9 month respectively free interest period on new purchases after the balance transfer has taken place. Be warned, though, that purchases made after any free period must be paid off each month in full else they will be charged at the cards normal rate of around 16% APR. If you roll over a balance, any cash applied to your account will first be applied to the zero or low interest balance on the card.
A compromise between low rate balance transfer and low interest charged balance on new purchases can be found with the Capital One Low Rate BT card. Transferred balances and new additional balances are both charged at a fixed rate of 9.9% APR until August 2012. With interest rates set to rise once economic recovery starts, this could be an option worth considering.
Many of the prestige cards will seek to charge an annual fee for the privilege. Additional benefits may include telephone help lines, travel insurance, special promotional offers or other add-ons. Make sure that if you want one of these cards that you really will use the add-ons or enjoy the kudos of holding the card.
Some card providers offer rewards programmes ranging from cashback offers (up to 5% with the American Express Platinum) through to Airmiles (Virgin Atlantic) or Reward Points (MBNA Platinum Rewards). Others, such as the Aqua credit card voucher codes scheme provides a range of offers on household goods and services
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