Here at the Credit Savvy office, we get asked lots of questions. One of the most common is: What credit card should I get? Well, the answer isn’t so simple. There isn’t one credit card that is the best in market. The right card for you will depend on what you need from a card and how you’re planning to use it. Maybe you don’t even need a credit card at all!

Let’s run through some common types of credit cards out there and what you should look out for.

LOW-RATE CREDIT CARDS

If you have trouble paying off your card in full each month, you might like to take a look at a credit card with a low-interest rate.

Low-rate cards can typically come in two types:

1. A low-rate card could have a low ongoing purchase rate for as long as your account is open. (e.g. 14% p.a. ongoing). This could save you in interest charges each month compared to a card that charges say 20% p.a.
2. Or, the card could have a low introductory rate. This intro rate is usually limited to a specific number of months. For example, 0% p.a. for 12 months. After the 12 months is up, any purchases will be charged at the ongoing (and usually much higher) purchase rate.

BALANCE TRANSFER CREDIT CARDS

If you have a large outstanding balance and you’re determined to pay it off, consider a balance transfer credit card.

A balance transfer allows you to take the debt you owe on an existing card and move it to a new card that charges a low rate for a specific period of time. A couple of notes:

• The new card usually has to be with a different credit card provider
• Make sure you pay off the debt before the initial period is up as the rate will revert to a much higher rate
• You may be charged a fee for transferring the balance
• There’s sometimes a maximum amount you can transfer to the new card

LOW-FEE CREDIT CARDS

A low-fee credit card can be useful as a backup or in case of an emergency. It can give you peace of mind that you have access to additional credit if you really need it.

There are some cards that have no annual fee at all, so even if you never use the card and it’s sitting at the bottom of your drawer, you’re not charged for keeping the account open. These cards are usually quite basic and don’t come with all the bells and whistles that a premium card would.

REWARDS CREDIT CARDS

If you’re a big spender and have no problems paying your credit card bill each month, you might like to check out a rewards credit card or a premium credit card.

Rewards cards allow you to earn points on eligible purchases made using your credit card. These points can be redeemed for goods, gift cards, cashback, and travel, just to name a few.

Premium cards are the gold, platinum, and black cards that have a higher status level. They usually come with extra benefits and perks such as complimentary insurance covers, higher earn rates for your points or a personal concierge service.

These cards often have a higher annual fee so just be careful that the fee doesn’t outweigh the benefits you’re receiving.

REMEMBER…

Everyone’s needs are different, so the right credit card for you will depend on your individual circumstances at that point in time. Don’t forget to shop around and do your homework.

As we always say, only apply for credit if and when you really need it and always read the product’s terms and conditions before applying.