What are the main elements of consideration when you take out a new credit card ?

1. The Initial Interest Rate And Period

Most of the credit cards offer a 0% interest rate on purchases at the begining for a limited period, about six to nine months. This option can be very attractive when you do not repay the balance in full each month. After the initial period the rate reverts to the standard rate, usually in the 10 to 16% range although this can be considerably higher.

Some cards however have no interest free offer but have a much lower permanent rate. If you are going to keep a long term balance, this option could be useful in the long term. Consider your payment ability before selecting the interest rate type, because you won't be able to switch rates.


2. A Monthly Interest Free Period.

This relates to the period between your purchase and when you will be charged interest on that. Many cards charge from the payment date after the item appears on your card statement. The effect of this is to give you between about 25 to 50 days interest free credit on all purchases. Paying off your balance within this period will result in no interest being charged.


3. Annual Fee

Many cards charge an annual fee. This fee is added whether you clear the debt each month or if you dont.


4. Transferring Balance

When signing up for a new credit card you will usually have the option of transferring any outstanding balance to your new card with a small percentage of interest charged for a specified period.This is actually not an interest charge but it makes no difference - you are charged a fee by the company based on the amount you have transferred.


5. The Availability Of Cashback

Many cards now offer a small percentage of cashback on purchases. This is usually is between 0.5% to 1% of new purchases, and they do not include balance transfers and cash withdrawal. If you do not repay your balance in full each month, take this into account when considering the interest rate chargeable.


6. Credit Card's offers - Rewards and Discounts

Rewards are where you can purchase at a discount by using your credit card, or you have free insurance on purchases made using your credit card.

Like in every other business, There is nothing free In the credit card business as well. If there are rewards offered, its likely the cost will be added somehow to your bill. So compare several cards who are not offering the same rewards.


7. Insurance for the Credit Card Payments

Most cards offer some sort of payment protection insurance in the event of disability or so. Most of the cards pay 10% of the balance on the card at the relevant period and may be worth considering.

Taking a new credit card is something that you should take a good consideration. There are many service providers available that can help you to select the correct Credit Card for you.