Each issuing bank is free, within certain parameters, to set their own terms. Here are some things you may wish to consider before applying for a credit card:
The interest rate - This is the rate of interest that your unpaid balance will be charged. If you're smart, you will pay your balance in full every month, but sometimes that isn't possible. Interest rates can vary widely, so you will want to find one that is as low as possible.
Fixed rate or variable rate? Some credit cards have interest rates that are tied to some market index, such as the Prime Rate and can vary with the rate. Other cards have fixed rates that, in theory, will not change over time.
Default rate - This is the interest rate that could apply to your purchases should you fail to pay your bill on time. Getting a low interest rate is nice, but if you pay late, that 10% rate could become 30% overnight, so read the fine print carefully.
Grace period - Some cards will charge interest on new purchases immediately; others provide a "grace period" of 25 days or so before interest applies. Having a grace period is a nice feature, since you can avoid having interest accruing on your purchase before you even bring it home from the store.
Rewards - Some cards offer rewards, such as frequent flier miles, cash back bonuses, discounts on services or merchandise or any one of a number of other creative things the issuing banks can come up with. These rewards can be worthwhile if you use the card a lot and pay off your bill promptly; they can be quite expensive otherwise. Interest rates on cards with rewards tend to be somewhat higher than for non-reward cards, so you will want to take this into consideration when applying.
As you can see, all credit cards are not the same. If you are a smart consumer, you will take the time to compare the hundreds of available cards in order to find the one that is best for you. There are a number of Web sites that will allow you to make the comparisons; just type in "compare credit cards" into your favorite Internet search engine. You might be surprised at what you will find.
Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to credit cards, debt consolidation, credit counseling, payday loans and personal bankruptcy.
