A Perfect Balance Between Interest Rates And ServicesMay 23, 2010 - 2:01 am
The goal of any credit card holder is to maximize the utility of their card while also limiting their interest rates and interest paid. In addition, everyone who carries a credit card would like to have access to some specialized services that make holding the card worthwhile, especially if a yearly fee is associated with it. Finding a balance between low credit card interest and special card services can be difficult, as many cards will offer one but not the other, or a combination of the two that is not favorable for the consumer. Although cards that balance service and interest are difficult to come by, they do exist, and there are a few ways to help track down cards that offer the best value for your money.
First and foremost, consider the credit card interest that you will be paying. This may come in two forms, especially if you are changing over from another credit card company. If that is the case, a new card company will often offer “balance transfer” rates which are limited-time low interest options that are used to transfer the balance of an existing card to a new one. Typically, these are in the order of four to eight percent, but will only last three to six months. In addition, the annual interest rate must be considered. If you are willing to pay a yearly fee for service, this interest rate can be as low as ten or eleven percent, but for no-fee cards, the rate can be as high as sixteen or even eighteen percent. This is not necessarily a bad thing – opting for a no-fee choice with a higher credit card interest rate can be of benefit if you never carry a monthly balance.
The interest rate and monthly fee must then be balanced out against any special card services that the company is willing to offer. This can include things like points programs, air miles, cash back or even savings that are deposited each time you use the card. As well, some credit companies have partnerships with certain stores or product lines to offer discounts on services if their cards are used. In addition to these more exceptional services, it is also important that a company offer security on their cards, either in the form of photo-ID stamps or electronic chips that require a PIN to be entered, much like a debit card.
No matter the card, or the special services offered, the key is to first determine your credit needs and then adapt accordingly. There are as many credit card options as there are companies, and one that balances both interest paid and services rendered can be found for any consumer.