Receiving credit cards offers can be an indicator that you’ve arrived. After that well-deserved promotion or that generous inheritance, you’re likely to find credit card offers beginning to pile up in your mailbox. And you wonder, how do credit card companies find out?
First of all, your free email account can help get the word out advertently or inadvertently. Even if you’re not into clicking ads of credit cards and other offers, the fact that you’re surfing the internet takes the guesswork out of where you’ve been and what you’re looking for; especially when cookies (not the fortune kind) are involved. In a way, this can be a blessing in disguise when you’re out to compare which among a sea of different credit cards can give you the best deal in town. You can run from all the digital footprints, but you can’t hide from those ads; especially when you have your pop-up blocker turned off or otherwise not working for you.
To compare credit cards accurately, you’ll need to perform the apples to apples and oranges to oranges test. After all, not all credit cards are created equal. Our first stop is the interest rate, which is the most important matter to consider when making a choice in a sea of offers. And you need to focus here because the vast majority of credit card companies will try to hoodwink you with the no-fees, bonus, rewards and a lot of other clauses that can easily blur your vision. It doesn’t really matter if they’re giving you a signing bonus of say, $250. If the interest rate is way too high, this or that credit card just doesn’t make the cut for your budget’s sake.
Low-interest credit cards, for example, hover around the 8.09% mark. The lower the interest rate, the better. Because it all comes down to the fact that you will use your card to make purchases and, in some cases, max out on the card. A good rule of thumb is to start popping the question when credit card companies try to hide the interest rate.
And once you get a straight answer along with that straight-in- the-eye look from the bank teller, you should immediately start to do the mathematical calculations in your head. If the interest rate is simply exorbitant, there’s nothing you can do to avoid putting yourself in the red. It’s just bound to happen before you know it.
Reward points can get your eyes popping, especially when somebody triples or quadruples them like a carnival juggler. But don’t get hoodwinked: Always compare credit card offers by doing the math and you can never go wrong. To illustrate, if you’re a high roller who easily racks up $45,000-worth of transactions from credit cards annually, that amounts to about $3,750 of purchases per month. Now if the annual fee is something like $140, that’s so easy for any credit card’s incentive (hint: free travel insurance, Air Miles, etc.) to be negated.
You, however, will still be left with bills to pay. So, the moral of the story is that you really do need to reign in your purchases by making only those that are absolutely necessary. If you can wipe your debt from credit cards before the next bill arrives in the mail: good for you. But if you can’t, like most people, self-control is everything.