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Rachel Preece
Staff Writer
25 June 2008
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IT could have been the billboard that caught your eye, or the television commercial, or the advert in a glossy magazine... there are many ways that credit card issuers try to grab our attention, but it's important to remember that there are over 1300 credit cards on offer, each one offering something different.
By spending just a few minutes doing some research and comparing credit cards, you’ll be able to find the perfect credit card for your needs.
Here are our top ten ways to compare credit cards:
1. Decide what sort of card you're after
Every credit card is different, offering different rewards, different APR rates and different 0% rates on purchases or balance transfers.
It may seem obvious, but you really do need to decide what you want out of a credit card before you start looking through the credit card comparison tables.
Maybe you want a fantastic reward scheme with cash back deals? Maybe you'd prefer 0% on balance transfers for a year or more?
There are so many credit cards on offer because each consumer wants something different from their card. It's all to easy to choose the card with the lowest APR rate or one with a fantastic balance transfer offer, but you have to look at the big picture.
By comparing credit cards based on your needs, you will be able to get the most from your card - maybe the APR won't be lowest rate available, but you could be reaping the rewards in other ways.
2. Watch out for introductory rates
It's all to easy to be swayed by a fantastic introductory rate, but keep in mind that they are just that - for an introductory period only, and the rates after this period tend to be much higher than with a credit card with no introductory rate.
There is also one crucial point to consider if you're after a great balance transfer deal. If the credit card company offers an introductory purchase rate too, make sure that this is not shorter than the introductory balance transfer rate. If you spend on the card, you cannot pay off these purchases until the balance transfer is paid, meaning that these purchases will be accruing interest, and leaving you with an extortionate amount to pay back.
Always take care when you compare credit cards for a 0% balance transfer credit card - if you know that you will use the credit card to make purchases, check the length of the introductory period for both balance transfers and purchases.
3. Compare credit cards online
If you don't use the Internet to compare credit cards, you are missing out on some brilliant deals. Many people still choose to pick up leaflets and information on credit cards from a selection of banks, or wait for junk mail from credit card companies to come through the letterbox, but using a credit card comparison site online is by far the best way to choose a credit card.
That way, you're not limiting yourself to a small selection of credit cards, and you can read independent reviews. Another bonus of using the Internet is the simple way in which information is presented. By printing the information in a credit card comparison table format, you can see what deal suits your needs in a matter of minutes.
4. Consider your credit rating
If you get the right credit card for you, it's likely that your credit rating will improve. If your credit rating is poor, consider comparing credit cards specifically designed for people with low credit ratings, such as the Barclaycard Initial credit card or the Capital One Classic credit card. See our credit card comparison chart for people with a poor credit rating here.
Although the APR may seem high, it might be a small price to pay (no pun intended) in the long run. If you're able to improve your credit rating significantly, you’ll have a wider range of credit card deals to choose from in the future.
5. Instant decision credit cards
Instant decision credit cards are ideal for those of us with busy lifestyles, and it's a brilliant way of speeding up the credit card application process. However, it really is worth doing your research before you dive in and apply for an instant decision credit card.
Each enquiry you make could potentially damage your credit rating. Multiple applications can signal fraudulent activity, and can appear as though you are trying to borrow large sums of money at once.
As a result, it's best to stick to just the one application of an instant decision credit card, and therefore you should plan what it is you require from a credit card. Instant decision credit cards are undoubtedly very useful, but it cannot be stressed enough that if you apply for one, remember to just make the one application.
6. Do you travel a lot?
The world is getting smaller, and credit card companies have realised the need to create specific rewards for those who travel frequently. The Post Office is in the lead when it comes to credit cards for travellers, offering commission-free use abroad with their Platinum and Classic credit cards. After your passport, your credit card is probably the most important item to take abroad, so this is a fantastic deal if you often have business trips abroad.
There are other rewards on offer for travellers too; including air miles with the British Airways credit card, and many of the credit cards designed for frequent travellers offer American Express benefits. See our use abroad credit card comparison for more information and to compare the best credit card for your travelling needs.
7. Shopping online
If you tend to use your credit card to buy items online, then it's worth checking out some of the many credit cards specifically designed for online shoppers. Barclaycard in particular offer a lot of shopping and travel discounts and with their Barclaycard Travel Service, you can pick up some great deals on holidays.
Compare credit cards for shopping online.
8. Fraud protection
Some credit card providers have better fraud protection policies than others, and if you're after a quiet life, it is worth checking and comparing credit cards to see which credit card companies offer the best fraud protection.
Capital One offers one of the best fraud cover policies in the UK, with a free identity theft service and two free Equifax credit reports per year, helping to protect you against identity theft.
Barclaycard also offer purchase delivery protection for goods bought online, over the phone or on the high street, as well as extensive fraud protection services.
All credit card companies have fraud protection policies in place to help protect their customers, but some companies have developed their policies better than others, so always have a look to see what's on offer in terms of fraud and identity theft protection when you compare credit cards.
9. If you always clear your balance each month...
It's worth looking for a credit card that rewards you for clearing your balance regularly when you compare credit cards.
If you do clear your balance each month, the interest rate is irrelevant. Instead, look for credit card rewards such as cash back deals, reward schemes or charitable donations - whatever best suits your lifestyle.
If you do try to clear your balance each month, but tend to forget or be late, then set up a direct debit, which will make your life so much easier.
10. Take note of any extra fees you may have to pay
Late payment fees, balance transfer fees, foreign transaction fees, there are many ways that you could end up paying a lot more than you expect, so take note of the small print and work out what's best for you when you compare credit cards.
For instance, a credit card company could offer a fantastic cash back scheme, but if you know that you will be using your credit card abroad, you need to refer to the foreign transaction fees too.
Finding the perfect credit card can seem daunting, and with so many credit cards on offer, it's all to easy to go for the first one we find, but just take those few extra minutes to compare credit cards and work out which one works for you.
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