It is hard to believe that credit cards are still relatively new in the scheme of History.  Thirty years ago, when people talked about the impatience of finally getting their “plastic”, they were usually referring to the anticipatory elation that was associated with the acquisition of a driver’s license.  Today that has all changed.  Credit cards have become an essential accessory.

There are simply too many institutions and companies offering credit card services, but most of them might not be right for you.  Just like logic and foresight is used when buying a car, so should the same rationale be applied when request a credit card.

In choosing a provider for your credit card, here a couple of things that you should pay attention to:

Your Interest Rates (APR):

Your card’s APR — that’s “Annual Percentage Rate” — determines how much interest you will pay on outstanding debts.  Obviously, in choosing a card, your mission here is clear.  Avoid credit card companies that have high APR figures.  Because of the intense competition amongst credit card companies, it is generally very easy to find a company that is willing to offer you a reasonable interest rate.  Ever changing policies adopted by companies might cause a future increase in interest.  If this happens, be sure to redress the issue instead of simply going with the flow.

Annual Rates:

Credit card companies are out to make some money.  At some point you might end up having to pay them some money for overdue bills.  No biggie.  It happens every now and then.  What should not happen are you getting sucked into paying an Annual Fee before you even use the credit card.  When choosing a credit card select one that comes with as little necessitated financial obligation as possible.  If you can find a card that offers no Annual Fees (and a lot of credit companies advertise that), they should be your preferred choice.  However, certain other factors, like your credit history, might affect your eligibility for that option.

Determine Your Budget:

Yes, it is possible to max out your credit card, but it is hardly advisable.  When deciding your personal plan for your credit limit, choose one that is suited to your expense plan.  Most credit companies will not charge you interest as long as you do not exceed your credit limit. Choosing one that best reflects your shopping expenses will prevent you from maxing out—provided you don’t develop shopper’s greed, of course.  Usually, it is best if you only use as much as 70% of your credit limit.  That being said that there are occasions when you might have to max out your credit card.  That is okay.  Just don’t do it too often.  It sends nervous signals to credit card companies.

Research The Company:

Sometimes, if a company seems too good to be true, it just might be.  Before you sign on the dotted line, does a little background check on the company?  Find out their history with previous customers.  Most credit card providers offer promotional incentives to their customers.  Find out what these are and if they apply to you.  Just as important are the penalties a credit card company imposes.

If you find out that the company’s policies are too harsh, mumble something about answering an urgent phone call, and make a dash for it.