Here's what you need to look for if you want to know how to choose a credit card.
No annual fee. Banks make enough money off of credit consumers without an annual fee, so don't pay one. Look for a credit card that specifically states "no annual fee" in its terms.
Low interest rate. If you are forced to carry a balance on your credit card from one month to the next, you're inevitably going to pay interest. Just don't make the mistake of paying more than you have to. Be sure to select a card with the lowest interest rate possible. The best cards offer rates that are just a couple of percentage points above prime. If you are satisfied with your current credit card company, you may even be able to call and negotiate a lower rate on your existing card. Just don't tie up more of your money in interest than you have to.
Favorable rewards program. Most credit card companies try to entice customers with a rewards program. It could be anything from an offer of frequent-flier miles to dollars off your Internet service. If you like the idea of these types of programs, make sure you select a card with a rewards program you can really use, and remember that you shouldn't have to settle for higher interest rates or an annual fee to get it.
Sufficient credit limit. Anticipate what you will need your credit card for, and then choose a card with a credit limit to cover those needs. You don't want to get caught up in fees for a maxed-out card or find yourself begging for a credit increase every time you find yourself short on funds.
Comparison Shop for the Best Deal
You may recognize the importance of comparison shopping for big-ticket consumer items like cars, electronics and homes, but you also need to recognize the importance of comparison shopping for a credit card. It's just as much of a consumer item, and it will probably cost you much more over the long haul than any electronic device or car that you purchase.
Reviewing the credit card offers that come in the mail is a good place to start, but remember that this information isn't complete. Since you are only receiving the offers that someone else decided to send you, you aren't getting a complete view of what's available.
For a more thorough assessment of all offers available to you, check out an independent website that rates the various credit cards. There are many sites that provide this service.
Making a Selection
Remember to give your credit card selection as much consideration as you would give a major purchase, and you're sure to end up with a credit card that meets your needs-even though you probably wish you didn't have a need at all.
An essential part of winning the overall war of personal finance is to manage and eliminate credit card debt. Managing and eliminating credit card debt means more than just making your minimum payments on time. Your goal should be to minimize debt and maximize available credit, so it's there when you need it.
Many people ask "can credit counseling hurt my credit?" if they are in financial trouble and see an advertisement for services that claim to help people in debt. Unfortunately, the truth about credit counseling and its impact on your finances isn't easy to pin down. Much of it depends on the type of credit counseling you choose.
Review the advantages and disadvantages of credit card debt settlement when you can no longer afford the minimum monthly payments on your credit cards and the balances, interest rate and various fees make it nearly impossible to make a dent.