President Barak Obama will soon turn his attention to high credit card rates. And you should too. Indeed, as credit card companies begin to charge what some say are "extraordinarily high rates," many Americans are looking to change their credit card issuer.
What should you consider when comparing and contrasting credit cards? First, think about how you will use your credit card. Do you expect to pay your monthly bill in full? Carry over a balance from month to month? Get cash advances? "Once you have decided how you will use your credit card, you can use this checklist to compare cards," the Federal Reserve wrote in an advisory on the subject.
- What are the annual pecentage rates (APRs) for purchases, cash advances, balance transfers, and if you pay late?
- What type of interest does the card have? Fixed or variable? Tiered?
- How long is the grace period if you carry over a balance, if you pay off the balance each month, for cash advances?
- How is the finance charge calculated? One cycle or two? Including or excluding new purchases? Average or adjusted? Minimum finance charge?
- What are the fees? Annual? Late-payment? Over-the-credit-limit? Set-up?
- What are the cash advance features? Transaction fees? Limits?
- How much is the credit limit?
- What kind of card is it? Secured? Regular? Premium?
- Does the card offer other features? Rebates? Frequent flier miles? Insurance? Other?
Information about most of the features is given in the "disclosure box" that must appear in
all printed credit card solicitations and applications, according to the Federal Reserve.
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