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How to compare credit card terms

how to compare credit card terms

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Review your past spending and look at the credit card bills you already have. Check to see how often you have paid the balance in full and how often you have run a balance. If you run a balance even some of the time, your main criteria should be a low, fixed interest rate. Shop for the card with the best possible rate and do not be swayed by reward programs or other perks. The value of those perks is not enough to make up for the increased interest you will have to pay.

Decide which rewards are most valuable to you. If you are a frequent traveler, you might want to look for a card that provides frequent flier miles or points toward hotel stays with every purchase. To maximize your earnings, look for a card that pays a high percentage on travel airline tickets, rental cards, hotel rooms and other travel related expenses.

Check the expiration rules for those frequent flier awards. Some cards have miles that expire, while others do not place an expiration date on the miles they

award. If you are a high spender, you should also seek out a card that does not limit the number of miles you can earn.

Compare the reward programs of the various cards on the market if you prefer to use your spending to earn gift cards, merchandise and other rewards. Check the point value of various merchandise and compare it to the price you would pay if you bought those same items for cash. Also check the gift cards the reward program offers and make sure they are gift cards you will actually be able to use.

Check the cash back reward percentages in various spending categories and compare them to the amount of spending you expect to have in each of those categories. Some credit cards offer 5 percent or more cash back on certain categories of purchases, including gasoline, restaurant meals and grocery purchases.

Read the fine print on each card for information on annual fees, grace periods and other details. Decide whether or not an annual fee is warranted based on the level of rewards you expect to get from the card each year.

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