Not all credit cards are created equal. Interest rates, reward systems and penalties may vary greatly from one card to another. Many consumers have difficulty identifying which issuers are offering the best deals, as the specific terms and conditions are often hidden in the fine print of the paperwork.
Nevertheless, thoroughly reviewing all the information pertaining to each product will reveal its advantages and disadvantages. For example, the Capital One Venture Card and the HSBC Platinum MasterCard with Cash or Fly Rewards may appear similar at first glance: both products let users earn points that can be used to purchase plane tickets.
However, closer examination reveals that a Capital One client will earn $180 for charging $1,500 a month within the first year, while a client of HSBC would earn $480 worth of points for the same usage.
A general overview reveals that there are two types of credit cards: cards with an annual fee and cards that don’t require such a fee. To determine which of these two types of cards better fit your needs, you will have to examine your charging requirements and habits. If you are a frequent traveler or big spender, you may actually be able tosave more cash – or earn more rewards/points – for choosing the card with a fixed annual fee.
Cards may also offer tempting sign-up rewards. In the case of travel cards, popular issuers are now offering a large amount of bonus points just for signing up; others are willing to offer even more extravagant bonuses if a specified amount is charged during a limited initial time period after opening an account.
Products offering these bonuses typically charge annual fees, but such expenditures are often waved during the first year. However, many card companies only sweeten the deal initially to get people to sign up. So it’s extremely important to base the selection of a credit card on long-term conditions such as penalties, rewards, rebates and interest rates.