US Credit Cards

If you have never had a credit card before but want one, you need to take time to research not only the different types of  US credit cards but also the way in which spending limits are set, how interest rate is charged, who is approved and denied, and so on.  The more you can learn the easier it would be to narrow your choices down for the right US credit cards.  After all, education is knowledge and knowledge is power.

All US credit cards are comprised of several factors to include fees, interest rates, grace period, and so on but the most critical of all is the interest.  Therefore, when searching for the best US credit cards, we suggest you begin by selecting several from reputable issuers that have low interest rates.  Interest can vary so dramatically and because of this, one card would be considered a good choice versus another that would lead to a series of problems.

Keep in mind that while credit cards will have a range for the Annual Percentage Rate, also known as APR, interest is also determined based on the applicant’s credit.  In other words, if your credit were less than perfect the amount of interest charged would be greater than if your credit were excellent.  For this reason, it is worth spending six months to a year to clean up your credit report prior to applying for any of the US credit cards currently available.

It is also important to consider the way in which the US credit cards establish interest beyond the applicant’s credit history.  For instance, some banks and card companies will advertise a low or 0% APR for an introductory period if the new card were used to transfer balances from a card you already have and with a high APR.  While often this is legitimate and a great way to save money, you need to understand what the APR would be after the introductory period but more importantly, you want to know the duration of the introductory period.

As an example, let us say you had an existing credit card or several US credit cards with a total balance of $2,000.  The problem is that you are paying 24% interest or higher.  This means the majority of your monthly payment is going to paying the interest and not the principal amount.  If you were to choose a new credit card whereby the outstanding balance of the other card was transferred over and for six months to a year you were paying a low or 0% APR, then you would have the chance to get the outstanding balance paid down or paid off in full.

The problem is that if the initial interest rate was set to jump from 0% to 25% and the introductory period was only one to three months, what would happen is that once you transfer the balance of the other card or cards over, in a very short amount of time the low or 0% APR would skyrocket.  At that time, you would end up paying higher interest on the new card than you were on the old card and the outstanding balance you had hoped to pay off or down is now costing you more.

As you look at different options for US credit cards, you want to become educated about fixed versus variable interest.

•    Fixed Interest – For US credit cards with a fixed interest rate, the interest offered when you secure the card would not change, at least for awhile.  However, even cards with a fixed rate will eventually change.  Even so, knowing that for a certain amount of time you would be locked into a low rate is to your advantageous.  Even if the interest were going to increase, the issuer would be required by law to provide you with a 15-day notice.

•    Variable Interest – The other type of interest attached to US credit cards is known as “variable.”  In this case, the amount of interest being charged on the card would be set using a calculation using the Annual Percentage Rate or APR but also the rate at which the bank borrows money, which is called the Prime Rate.  Because of this, whenever the economy becomes stronger or weakness, which in turn causes fluctuations, the amount of interest charged on the US credit cards would be adjusted accordingly.

The key in choose US credit cards is to understand the rate of interest but also type.  Additionally, you want to know the number of days before a payment would be due, the minimum monthly payment, annual fee, late charges, over limit charges, balance transfer or cash advance fees, rewards, etc.  All of these considerations combined would help you choose the card that will enhance your life but also be easy to manage from a financial perspective.