The market is literally flooded with different cards. To make matters even more confusing, the T&C’s are changing all the time. It is important to compare credit cards every 12 months to ensure that interest, fees and charges are kept to an absolute minimum. It is possible to perform a credit card comparison online at sites, such as moneysupermarket.com, in order to compare the factors that are most important to the borrower. It is important to appreciate that certain factors may not be relevant.
Perform a Credit Card Rate Comparison
A low rate credit card is an important consideration for those who don’t usually clear their balance at month end. The Consumer Action credit card survey reviewed the rate of interest on 41 different cards from 20 different banks. Although the median APR was 13.54%, interest rates ranged from 6% to 22.75%. At a time when providers are increasing rates due to rising default rates, signing up to the most competitive deal has rarely been more important.
Compare Credit Cards for Fees for Exceeding the Limit
The Pew Safe Credit Cards Project revealed that 92% of cards imposed a charge for exceeding the credit limit. The average charge was $39. Most card providers subsidise the headline APR on charge cards by imposing fees. Trawling through the market to identify a card that doesn’t impose a fee for going over the limit or late payment could prove invaluable.
A Credit Card Comparison for Annual Charges
The recent legislative changes in the U.S. means that it is important to compare credit cards to identify those cards that don’t charge their customers an annual fee. This is an up-front fee that is paid just for having the card. The Aite Group survey revealed that 64% of respondents deemed the absence of an annual fee was very important. According to Consumer Action, the average annual fee amongst providers who imposed this charge was $43.50.
Zero Percent Balance Transfer Offers
Should the customer have an unpaid balance, performing a 0% credit card balance transfer could help to save hundreds of dollars a year. For example, let’s assume that customer x has $10,000 of unpaid credit card debt at 14% APR. After taking into account the 4% transfer fee, the customer saves $1,000 a year in interest payments. Performing a succession of transfers could help those who are in debt. Not a relevant consideration for individuals who rarely carry any debt on their charge card.
Why a Credit Card Comparison is Important
It is important to compare credit cards because it allows the customer to identify a card that is most appropriate for their needs. Whilst most people are attracted to a card offering a low headline rate of interest, this isn’t an important consideration for those who settle their balance in full each month. However, finding a card with no annual fee could help to save money. Scan through the different criteria in order to identify the credit card deal with the most appropriate features.