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3 simple rules for comparing credit cards

Finding the right credit card can be a tough task. There are a wide range of cards available, and comparing one versus another may prove to be challenging and time-consuming.

Since finding a suitable credit card depends on personal circumstances, it could be a good idea to consider where it will be used, what its intended use is, and whether international travel is undertaken on a regular basis. Responses in those three areas could make it easier to compare cards and find the one that best fits with an individual’s current situation.

Where will it be used?

With a number of credit cards offering rewards and cashback on purchases, determining where it is most likely to be used may be a good idea. For example, consumers who regularly spend a significant part of their monthly budget at a specific supermarket may be better off looking into a supermarket credit card. Such a card can offer higher rewards or cashback for money spent in store and may mean that rewards accumulate faster.

Other cards offer a standard rate of cashback wherever they are used. They could be more attractive to an individual who intends to use their credit card at a variety of stores rather than a small number of retailers. Such individuals may be able to gain more value from cashback than rewards vouchers that can only be spent at a specific store.

What will it be used for?

Deciding what a credit card will be used for could help to compare different options. For example, an individual who has existing debt on other credit cards may benefit from using a balance transfer card. This could reduce their interest payments and provide them with breathing space when seeking to reduce their debt.

A consumer who wishes to make a large one-off purchase soon may benefit from a card that offers a 0% rate of interest on purchases for a limited time. This could help to ease their cash flow, while also leading to minimal interest payments. Similarly, someone who intends to use their credit card only every so often may be better off focusing on cards that do not charge an annual fee.

Is frequent international travel undertaken?

For individuals who travel internationally on a frequent basis, a credit card that does not charge a non-sterling transaction fee may be useful. Many cards charge such a fee, which can often be around 3%. This can significantly increase the cost of international travel – even on an annual holiday.

Therefore, for individuals who travel internationally relatively frequently, a credit card that does not have a non-sterling transaction fee could be worthwhile. Such cards may not offer 0% interest deals or the same level of rewards as others, but the savings made when abroad could offset this to a large extent.

The bottom line

As ever, finding the right credit card comes down to considering personal circumstances and spending habits. By focusing on areas such as where the card will be used, what it will be used for, and international travel requirements, it may be easier to find the right card.

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