If you want the flexibility to purchase items and pay later, you may be in the market for a credit card. In today’s competitive market, there are so many cards and providers that it can be difficult to determine which type of credit card would be best for you. If you want to make sure you pick the right card, start by understanding what cards are available and how they work.

Overview of credit card services

• Basic: regular, guaranteed, prepaid, premium, debit option; each has different advantages and disadvantages.
• Type – Visa, MasterCard, American Express, Diner’s; some cards attract higher fees from merchants and not all merchants accept all cards.
• APR/Interest: fixed, variable, multiple, graduated, introductory; Interest payments can be significant, so make sure you understand how they are calculated and charged.
• Fees – Annual, finance charge, fines; make sure you know what flat rates apply, how much they are and when they are charged.

What are your needs?

By asking yourself a series of questions, you can find out what you’re most likely to use a credit card for. Here are some to get you started:

Q. What do I need a credit card for?

A. If your credit card is for emergencies only, then you can probably buy a card with a lower credit limit, which in turn will lower your monthly payments even with a higher interest rate. If it’s for vacation purchases or other big expenses, then a higher credit limit card with lower interest rates will be a much better option.

Q. Will I pay the balance in full each month?

A. A card with no annual fee and a longer grace period will be the best option for you if you don’t pay the full amount each month. If you pay monthly, consider setting up an automatic payment to your credit card from your regular savings account, as missing your monthly payment can cost you a lot in fees and interest.

Q. Are there any special features with the card?

A. You may be able to earn Air Miles (frequent flyer miles or points), gas points, or similar promotions each time you use your card. Other options may be a charitable donation from the credit card company each time you use it, so always find out what features your card offers.

Q. Is the card secured?

A. While credit cards are great for stretching finances, they can also put a strain on you if something goes wrong. If you lose your job, for example, or suffer a serious injury that prevents you from working, does your credit card company cover your payments? This is very important to find out. Also, is your card covered for purchases made in case of theft?

Make a short list of suitable credit cards

Soon you will be able to compile a short list of cards that seem to meet your needs. Now you’re looking for the best fit. Secured cards are generally better for people with limited or poor credit and require a security deposit. The size of the deposit dictates the amount of the credit limit. If you have a good credit history and a regular income, regular unsecured cards will meet your needs. These do not require a security deposit and higher credit limits are available. If you qualify for a premium card, like gold, silver, or platinum, you can get higher credit limits and enjoy bonuses like travel insurance, purchase warranties, and emergency service options.

Advice: Make sure you know exactly what the finance charge is and how it relates to the other aspects of your credit card (monthly payments, balance transfers, etc.).

For everything you need to know about choosing the right credit card, visit Buyz123.com: Credit Card Buying Guide