Since there are some benefits to using credit, most households have a minimum of one credit card that can be used carefully. But which one is the best credit card to get?

Don’t just apply for any old credit card and wait for the creditor to approve you.  Make sure you approve the creditor.  Here’s how.

DO YOUR HOMEWORK

Research the creditors and the specific credit cards you are considering before you even apply.  Be sure to get information on the following topics:

          * Is there a special, low introductory rate, and if so, when does the rate change and what does the rate 
            change to?
          * What is the APR (annual percentage rate) for purchases, for cash advances, for balance transfers, for late
             payment penalties – is it fixed? Variable? 
          * Can a “fixed” rate ever be changed, and if so under what circumstances?
          * When does a “variable” rate change?
          * What is the method of calculating finance charges (the same APR may yield different amounts due 
             depending on the way interest is calculated)
          * What is the length of the grace period, if any, before payment is required without incurring a finance
             charge?
          * What is the minimum payment required (usually calculated as a percentage of the total balance)?
          * Are there over-limit fees, and if so, how are they calculated?
          * What are the annual fees, if any?
          * Are there any cardholder benefits, and if so what are they?

If there is fine print that you can hardly read, copy and enlarge it so it is easy to read.

For further information about what to look for when researching credit cards, visit the website of the U.S. Federal Reserve Board at www.federalreserve.gov/consumers.htm.

Carefully Review the Information You Gathered.

Let’s face it.  This can be pretty tedious stuff.  But hang in there, and take the time to re-read all the data you so carefully researched.  Use the Credit Card Comparison Table on the next page.  Then think about which combination of credit card terms is best for you and your family.

If you are uncertain about something, call the creditor you are considering doing business with, and get a clearer understanding.  Remember: you need to approve the creditor first.  Information is power.

CREDIT CARD COMPARISON TABLE

Download a PDF of the worksheet

Creditor
Card Name
Intro Rate for ?? months
APR for purchases
APR for cash advances
APR for Balance transfers
APR for late payments
APR is FIXED or VARIABLE
Grace Period Terms
Minimum payment (?% of balance)
Over limit fees
Annual Fee
Cardholder Benefits