Credit card offers seem to be everywhere, on TV, radio, online and in your mail. So how do you cut through the marketing spin and actually figure out the difference between the credit cards and pick the best credit cards for your needs?

In order to compare credit cards you should understand the main features found in many credit cards.

Balance Transfer APR: APR stands for annualised percentage rate and is the equivalent annual interest rate. With a balance transfer the APR is the rate that applies for an introductory period on balances you bring across from existing store or credit cards with outstanding balances. Look out for transfer fees which are upfront fees calculated as a percentage of the balance transferred.

Introductory Purchase APR: This is the interest rate that you will pay on purchases for a promotional period once you take out the card. Not all cards offer an introductory rate but if they do, just make sure you know what the interest will revert to at the end of the term and read the terms to ensure you’re not caught out with a big interest charge once the offer expires.

Purchase APR: This is the standard credit card APR charged on purchases. The right card for you is going to come down to how you will use the card; if you’re not going to pay your bills in fill then a low interest card will save you more than you would earn in points, however if you do pay in full then interest won’t be your main priority.

Interest free days / grace period: You may see offers such as ‘up to 55 days interest free’ advertised. This is the time period from making a payment until the bill is due. Cards with a long grace period mean that if you pay your bill in full before the due date each month then you won’t pay any interest. Some cards have no grace period on purchases and most cards have no grace period for cash advances and in this case, interest is charged from the day of purchase or advance.

Annual Fee: Many cards have now dropped their annual fees but you may find that some premium cards do still charge an annual fee in exchange for extra features. Just make sure that the value of any extra features outweighs the annual costs of owning the card.

Rewards scheme: Rewards schemes come in all different shapes and sizes such as cash back, shopping rebates, points, airline rewards and much more. Do some basic math before you apply and calculate if the rewards your liekly to earn will be greater than the interest and fees. Also choose a card that offers rewards that you want. Most rewards programs offer rewards that average around one cent in value per dollar spent so don’t spend up just to earn some extra points, it’s simply not worth it.

Next time you’re looking for a new credit card you should have a good understanding of how to compare credit card offers side by side before you apply. It’s not possible to suggest a credit card that is right for everyone, the best credit card for you will depend on your needs.

Article by R Greenwood from The Click 4 Group – www.compareyourbank.com.au