What Makes a Credit Card Better Than Others?

There are literally thousands of different credit cards available. They all claim to be the “best”, they have the lowest APR’s, the least number of fees, the best rewards… But how can you really know which credit cards are better than others? It is important to know exactly what you want out of your credit card first. If you are just looking to build up your credit score so you can qualify for a mortgage or a different line of credit you should not be too picky when it comes to which card you end up choosing. If you are looking for a card to use for almost all of your daily purchases so you can rack up rewards points look for cards that are the most reward friendly and cards that have long grace periods so you will have a longer period of time where you do not have to pay interest on new payments.

As I mentioned above, it all comes down to what you want out of the card. These days you can pick a card that revolves around your needs. Visa, Mastercard, American Express and other credit card companies all have dozens of different cards aimed towards different segments of American consumers. The better credit score you have, the more options you will have. Credit cards aimed towards people with high credit scores generally have very low APR’s and fees because the credit card company feels safe loaning money out to someone with a good credit history. A large portion of the fees and interest a credit card company charges is to make up for the defaults, meaning the number of people who end up going into bankruptcy and fail to pay off a large portion of their balance. If you have a poor credit score in this lending climate you will have a much harder time finding a credit card that will fit your needs. Look for a card from a company that you can trust that has fairly low fees. You will not find a card with an APR below 13-15% so just be diligent in paying off your balances timely each month and you will be fine.

People get so caught up in the APR of a credit card that they tend to ignore other important facets of the card. While the APR you pay on your card is very important, especially if you do not pay off your balance in full each month, there is more to a card than just APR. One thing to look out for when owning a credit card is fees. There are more fees involved in owning a credit card than you could imagine. Everyone knows what an annual fee on a credit card is, it is the price you have to pay each year to own the card. While I am a fan of no annual fee cards, I do not mind owning a card with a low fee, fewer than 50 dollars, as long as I know I am getting my money’s worth. Never own a credit card with an annual fee above 50 dollars! Over the limit fees are very common as well; this is when you make purchases using your card that brings your balance over your limit. This fee is justified in some cases, but many times credit card companies lower credit limits with little to no warning and do not give their card holders a fair chance. The average late fee, assessed when you do not make a minimum payment on time, is 30 dollars [and rising], this is another reason why it is so important to be on top of your credit card balance. A lack of credit card fees can help to separate good credit cards with “okay” credit cards.

Another underrated aspect of a credit card that many initially ignore is the support you will be given with the card. Many people do not realize that you can negotiate your APR, different fees and potentially raise your monthly limits just by giving your credit card company an E-mail.A lot of things can go wrong when you own a credit card. It can be stolen and someone can rack up bogus charges, you can have your monthly balance limit lowered, your APR can be mysteriously raised with little to no warning… Basically, you want to get your credit card from people that you know you can trust. It is perfectly fine for a credit card company to want to make money, banks make money, grocery stores make money, gas stations make money… There are very few non-profit companies out there, but you want to work with someone who is going to look out for your needs as well. The number one aspect of a credit card that makes it better or worse than others is the support you will be given after you are granted the card.

I have been around the credit industry for a while and American Express has the best reputation of all credit card companies. They have a very wide variety of cards that are sure to meet your individual needs and they actually seem to care about their customers which is a must. The only downfall I have noticed with American Express is that their cards generally require an above average credit score so a large segment of prospective credit card owners are left out in the cold. If your credit score is good enough to qualify you for one of American Express’s many credit cards you should jump at the opportunity!