When choosing a credit card, make sure you read those pesky – and important – details.

3 minute read

How can you know how to choose the best credit card for your needs? For many Americans, knowing what to look for to pick the right credit card is a challenge.

According to a nationwide survey by major credit bureau Experian, 61% of consumers feel overwhelmed by the “sheer number” of credit card options available when choosing a credit card. Around 57% said they don’t know how to tell if a specific credit card is the best fit for them.

That doesn’t mean they’ve given up on finding the right credit card, however. “The majority (64%) believe the perfect card for them is out there, and they just haven’t found it yet,” says Experian. To find the best credit card for you, it’s crucial to look at the details beyond the card’s offer page.

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1. Interest rate

One of the most important factors to consider when choosing a credit card is the interest rate. That’s because when you don’t (or can’t) pay off the statement balance due each month, you’ll rack up interest charges. Those charges can add up fast, especially if you’re carrying a high balance.

In October 2020, the average APR on new credit cards was 15.97%, according to CreditCards.com. Retail card APRs are generally much higher, sometimes even above 25%. To see what a difference the card’s APR can make, punch in some numbers on a credit card interest calculator to see how much you would pay on a balance due amount.

If you’re already signed up for a credit card with a high-interest rate, pay off your statement balance due monthly to avoid paying interest. When looking for a new credit card, you will find the interest rate in the card’s terms and conditions as well as the card offer details.

Find out: The Ultimate Credit Card Hacks Guide

2. Introductory promotional period

Before you apply for a credit card with an introductory 0% APR or similar low-interest offer, make sure you know how long the intro period will last. For example, if the 0% APR intro period lasts only six months, you may want to continue your credit card search for a card with an introductory APR period of a year or 18 months.

Generally, a credit card offering a 0% APR will promote that information on the page advertising the card and in the offer details. You will also find both the introductory interest rate as well as the new interest rate that will apply after the promotional period in the terms and conditions, sometimes also known as “pricing and terms.”

Find out: Which Credit Card Should I Pay Off First?

3. Balance transfer fee

If you want to hit a high credit card balance hard, transferring the balance to a new credit card with a 0% APR for an introductory period for an extended number of months can be a great way to save on interest while paying off the balance. However, make sure you look at the balance transfer fee first.

Most balance transfer cards charge a balance transfer free ranging from 3% to 5 of the amount transferred to the new card. If you will save more on interest than you will pay on the balance transfer fee, the transfer could be a smart move. However, if the transfer fee will exceed what you would pay on interest on your current card, you may want to skip applying for the new card.

You can find a card’s balance transfer fees in the credit card terms and conditions.

4. Annual fee

You may get so excited reading about a credit card’s generous rewards program that you jump immediately to the application without noticing that the card has an annual fee. That annual fee may not be just $69 or $99, either. Some cards with super-generous rewards programs charge up to nearly $600 for the annual fee.

Always check the offer details and terms and conditions to find out whether a card charges an annual fee before applying. If the card has an annual fee, the issuer will typically charge that fee on your first statement.

Many cards with generous rewards programs don’t charge an annual fee, so it pays to take some time to compare cards’ rewards and benefits before applying.

5. Rewards program

Generally, rewards credit cards tout their rewards program on the card’s offer page, since consumers love to rack up credit card rewards for airline miles, hotel discounts or cash back. The card may offer cash back at the end of the year, 5% for travel or 3X points for gas or grocery purchases, for example.

Even when the rewards seem clear-cut, however, you need to know the details, including restrictions or requirements. For example, a rewards card may offer higher points each quarter for purchases in certain categories such as gas, groceries or utilities. However, you may not receive those points unless you go on the card’s website and manually “activate” your card during the new quarter.

To find the requirements for rewards programs, look in the offer details, often under pricing. You will also usually find information about how to earn and redeem rewards on the card’s Pricing & Information page.

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About the Author

Deb Hipp

Deb Hipp

Deb Hipp is a full-time freelance writer based in Kansas City, Mo. Deb went from being unable to get approved for a credit card or loan 20 years ago to having excellent credit today and becoming a homeowner. Deb learned her lessons about money the hard way. Now she wants to share them to help you pay down debt, fix your credit and quit being broke all the time. Deb's personal finance and credit articles have been published at Credit Karma and The Huffington Post.

Published by Debt.com, LLC