Which Credit Card Is Right For You?

Published by Financial Aid Consulting on Tuesday, 12th June 2018 - 12:00PM in Managing Your Money Is Serious Business


Which Credit Card is Right For You?

by Howard Freedman

Copyright 2019 Financial Aid Consulting. All rights reserved. No portion of this article may be reproduced mechanically, electronically, by photocopying or by any other means without expressed written permission of the author.

Howard can be reached at finaidguy@gmail.com

Credit card companies employ aggressive marketing tactics to capture our attention. Low-interest cards, no annual fees, high credit lines, and numerous other ploys are used to encourage consumers to fill out those applications. Before you are tempted by another offer, ask yourself if you really need another credit card—think about how that lightweight piece of plastic could create a heavy financial burden if used indiscriminately. Then, look at the plastic you already carry. If your current credit card is an asset that offers convenience and low cost, you’re wise to keep it. On the other hand, if the card is burdensome with high payments and interest, you might want to look for a better one.

Because there are hundreds of credit card deals, you must find the card that will offer the greatest value you must find the card that will offer the greatest value and convenience to fit your payment style. Since the Truth in Lending Act protects you by requiring lenders to disclose the costs, terms, and conditions of their loans and credit cards, it should be easy to compare credit card offers. Use the following two scenarios to determine the type of card that is right for your situation:

Scenario One

If you pay your bills in full each month, look for the best promotional deals. It is worth paying an annual fee to accumulate points for free hotels, air travel, and car rebates because the cost for these services is much higher than the annual fee. These cards are also great for paying expenses such as tuition and home improvements as long as you have cash on hand to pay the bills when they are due. Visit the following Web sites to

■ Pay your bills online. It’s quick, and you’ll never have to worry about your payment getting lost in the mail. Don’t use payment services that charge a fee, unless you are likely to have a high balance and want to ensure that the payment is received on time.

■ Test the customer service line to measure how quickly your call was answered and the number of steps it took to get the results.

■ Review your last billing statement and document. This is the baseline to ensure that you have the greatest cash flow during the month.

Prioritize what is most important to you and look for the best deal. The bottom line for people who pay their bills in a timely manner: search for credit cards that offer reward points, have a low annual fee and offer a long grace period. Combine those features with great customer service and you’ve got yourself a winner.

Scenario Two

· If you tend to carry balances from month to month, look for the card with the lowest fixed interest rate; Avoid teaser rates that do not guarantee a stated fixed rate when the introductory period ends. Review the balance method the company uses for calculating interest and avoid methods that are based on two billing cycles rather than one. Finally, look for late payment fees when a minimum monthly payment was missed—this is where online bill payments can save you money.

• Look also for a card with the longest grace period. Coordinate bill payments to coincide with your paydays. Employees paid semimonthly or monthly may find themselves unable to make payments if the funds are not available at certain times, so this is an important consideration.

• Contact your preferred card’s customer service department. Then ask them to calculate a penalty and interest as if you were delinquent on a $1,000 balance. They should explain how the late fees and interest were calculated and the interest rate used. Repeat this exercise with other companies.

• Avoid in-store credit card deals— these can be very costly. I once made a $40 purchase and got a10% discount for opening a new credit card account. Two months later, I received a “second notice” bill (before the first bill had ever arrived) charging me a $29.00 late fee. That initial $4 savings wound up costing me an additional $29 simply because I didn’t read the fine print. Haste does make waste!

Check the following US Government website for valuable loan information:


If none of the credit card deals fit your needs, and you want to end the marketing blitz in your mailbox, stop solicitations by calling:

1-888-567-8688, or by writing to:

Direct Marketing Association, Preference Service, P.O. Box 9008, Farmington, NY 11735-9008

Your name can also be removed from national telemarketing lists by writing:

Telephone Preference Service, Direct Marketing Association, P.O. Box 9014, Farmington, NY. 11735-9014

It’s up to you to determine your credit needs—or if you even need credit.

By shopping around for the best deal, you can make your credit card a friend rather than a foe.

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