How to Evaluate Credit Card Offers

When you see a credit card offer how do you know if it’s a good one? With so many different credit cards on the market, it can be difficult to know where to begin in evaluating the latest credit card offers.

If you’re not sure which credit card offer is right for you, and which ones to skip over, here is a guide to help you evaluate any credit card offer that comes your way.

• What’s the big deal? Most credit cards have some sort of promotion, or deal, they are dangling in front of potential new members. Is this card offering a balance transfer with a zero interest promotional period? Maybe it gives you a few months of no interest on purchases, or a bunch of frequent flyer miles, or the chance to earn cash back. Look at what the card is offering and think about whether it would be valuable to you. For example, if you aren’t carrying any other debt, you don’t need a balance transfer offer. And if you aren’t a big traveler, then frequent flyer miles aren’t much use to you. If you can’t use the offer, move on. There are many credit cards out there, and one will have an offer that you really do want.
• What’s the APR? Every credit card has an annual percentage rate—or APR. This is the amount of interest you’ll pay on any balance you carry from month to month. Even if you think you won’t be carrying a balance, it’s a good idea to choose a card with a low APR. It’s easy to spend a little more than you meant to, and end up with a revolving balance. And, that’s one of the nice things about credit cards—that you can do this if you need to. When you have a card with a low APR, you’ll be able to pay off your balance faster, and you’ll pay less interest on it.
• Are there fees? Some cards have an annual fee. This doesn’t mean it’s not a good deal, but if the credit card you’re considering does have an annual fee, find out what it’s for. Some reasons for paying an annual fee might be: getting a lot of bonus miles or points that you can use for free hotel rooms, flights, gift cards, or merchandise, having access to 24/7 concierge service to help you make reservations and travel arrangements, or getting travel insurance and purchase protection from your credit card. Look at the fees under the terms and conditions and make sure you know what the card will cost you.

These three questions are a great starting place when you’re looking for a new credit card. Of course, you’ll want to consider how high your credit limit will be, what the issuing bank is, if it’s a MasterCard, Visa, Discover, or American Express—but finding out these things will tell you most of what you need to know when you’re choosing a credit card.