While the credit card industry is one of the largest in the financial sector why is it that everybody seems to dread their credit card statements each month? We all have them because they are a necessary evil but what can we do to ensure we get the best deal available?

The competition in the credit card industry is cut throat with each provider trying to grab as much of the market without giving away too much in the way of add-on benefits to the consumer.  There are many ways to “hide” fees, or make them difficult to find and it is vital that you do your homework before deciding who to go with.  You should consider the following factors when considering the merits of a particular credit card :-

APR (otherwise known as the Annual Percentage Rate)

This is by far the most important element of any credit card, the cost of running a balance which is left in debit throughout the whole year.  The APR will take into account all charges on the account as well as interest charges, something which can really change an attractive headline rate. 

Under law, US credit card companies have to make a potential customer aware of the APR before they enter into agreement and the rate has to be shown on each statement sent to the client.  Many credit card companies may take the route of lowering their headline rate of interest but increase (or introducing) the number of charges throughout the year, whether one-off charges upon set-up or ongoing monthly charges.  The APR will take these charges into account so as to ensure that while opting for a low headline rate, your will be able to spot the higher APR because of the charges.

Grace Period

The majority of credit cards will allow you a period of grace, traditionally a calendar month, during which time you will only be called to pay for the purchases in full at the end of the month.  If you do not pay off the amounts in full by the due date then you will be charged interest on the purchases, at the published rate. 

The grace period on your card can be very important as there are some cards which do not give you any grace period, but may well offer you a lower APR, ensuring that they make a “profit” on each purchase which you make.

Fees

When you see the headline figures about the “low” interest rate your prospective credit card provider will charge you, many people forget to look at fees.  Many providers will increase their income by charging an array of fees from, an initial set-up fee to statement fees.  You also need to keep a very close eye on any fees which you may incur for being late with your payments, etc.

One small fee by itself will not make a big difference but if it is charged every month it is an extra cost to you, and money which you could have used to pay off your debit!

Rewards

When a new credit card comes to the market it may well be accompanied by an array of “free” offers, insurance cover and similar “attractions”. Very often on further investigation you might find that these offers are only very basic and often in the main not much use to you.  On the other hand they may be very useful offers but you may find that the rates are a little higher or they charge more regular fees.

Be very careful when choosing a credit card because of the offers it comes with as there is no such thing as “a free lunch” in the financial industry – you will pay for all of these little extras at some stage!

Balance Transfers

Such is the competition in the credit card sector that each and every day of the week there will be a 0% balance transfer offer to entice you to transfer your finances to a different credit card.  The period of 0% interest might be anything from a couple of months to a year, or in some cases until the amount you transferred is paid off.  If you use these offers correctly it is possible to greatly improve your finances and save yourself substantial money.

However, with balance transfer offers you need to understand that the interest rate on new purchases may not be as competitive as the traditional rates on the market.  Normally your payments will all go towards paying off your balance amount, thereby new purchases may well attract substantial amounts on interest awaiting the full repayment of your 0% balance element.

Conclusion

There are many credit cards offers on the market to suit almost any situation and any occasion, whether you are looking to transfer your existing balance and pay it off at 0% APR, or your are looking to spend, gain reward points and then pay off.  The trick is finding a card which best suits you situation and offers you the best rate possible.