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 1. I have a balance I am trying to pay off ASAP. 2. I never carry a balance, always pay my bill on time, and make complete stops at every stop sign. 3. I occasionally carry a balance, spread my spending across several credit cards, and sometimes pay cash. 4. I have little or no credit history, or one riddled with blemishes, and I can't seem to qualify for any credit cards that I know of. 1. Paying off a balances: If you are carrying a balance, a low introductory interest rate is a nice way to get ahead and pay down your debt faster. Keep in mind, though, that you'll probably give up some other perks, like airline miles or cash rewards, which you wouldn't get anyway if you aren't planning on spending anymore to the credit card. What to look for: The right interest rate. Obviously, find the lowest interest rate offered. But since many cards have teaser rates, you have to know both what your initial rate will be, as well as what that rate will go up to after the teaser period soon ends. If you have a lot of debt, you probably won't get it all paid off before the rate goes up. Try to get a card with no annual fee. This is a good feature to have, especially if you plan on canceling the card once you're home free on the debt front. If you do have to pay an annual fee to get a great interest rate, make sure to factor that into the cost of paying down your debt. Here may be the perfect one for you. Watch out for: 1. The rate games. Cards do all sorts of things that can bump your rate. Sometimes, low rates only apply to new purchases, which doesn't help your existing debt because it was balance-transferred onto the card. Conversely, a low rate on balance transfers may not cover new purchases. In addition, rates may adjust unexpectedly, especially if you are late on a payment. 2. High penalty rates or fees. Penalty rates aren't only activated when you make a late payment. There are penalty rates for everything from paying off your transferred balance too soon (some even retroactively affect balances you've already paid off) to carrying too large of a balance on another credit card entirely (why do they care what\'s on another card, anyway?). 2. Never carry a balance: Well aren't you a goody-two-shoes? The credit card world is your dream world. Why not get some perks for being a pristine credit card carrier? You can earn airline miles, perfume, gas, and even cold, hard cash by using your credit card. What to look for: At least a 20-day stale grace period. If you don't ever carry a balance, you should never pay any interest. But in recent years, the amount of time you have to pay your bill has shrunk. Without a grace period, you\'ll be charged interest before you even get your bill. Look for a card that offers rewards. If you're going to use it anyways, why not get something back for your credit card use? You can get airline miles, points for rewards programs, or cash. Look for low fees. Many reward cards carry annual fees. Make sure the rewards outweigh what you pay for them. Here may be the Perfect One for you. Watch out for: 1. High or any usage fees. Usage fees are different from annual fees, in that you can be penalized if you do not use your rewards card enough. Though this is rare, watch out for rewards cards that charge fees for not regular usage. 2. Expiration dates on points. Some mileage programs have a "use it or lose it" sub-clause, where the points you accumulate may not be carried over into the next year. 3. Blackout dates. Depending on the airline and the deal the lender has secured, miles you earn by charging may be subject to certain time/day/month/location restrictions. This is especially problematic if you are unable to schedule a flight using your miles before they expire; often blackout dates are when you really want to fly. 4. Minimum spending requirements. Many cash-back programs require you to meet a minimum-spending requirement before you get one dime back. Some also have a steeped program where if you spend up to X number of dollars, you get 1% back; if you spend Y number of dollars, you get 2% back, etc. Ideally, you want a cash-back card that starts paying you back right away at a consistent rate, no matter how much you do or don't spend or when you spend it. 3. Sometimes carry a balance, or have multiple cards: What to look for: A card that can help organize your spending. Some billing statements are better than others. If there's a stand-out, one that helps categorize your purchases and analyze your spending patterns, consider canceling your other cards and sticking to that one. Some payback - even if it's really small. With a reward card, especially ones that offer cash back, at least you're getting a little coin back for your plastic usage. Here are some options for the Perfect Card for you. Watch out for: 1. Carrying too much credit. It's not the number of cards you carry; it's the amount of available credit you have at your disposal that can be your downfall. Having total credit limits that are too high can make you a credit risk to many card issuers. Keep your access to plastic limited (most people only need two, maybe three credit cards, at the most), and your credit limits totaling no more than 25% of your income or else you will get a negatively affected credit score. 4. Bad or no credit history, and trouble qualifying: If you've had trouble getting a regular credit card, first, head to your bank. Your best bet in qualifying for a line of credit lies with the institution that harbors your money. Many banks offer debit cards -- linked directly to your checking account -- that can also act like a credit card. If your bank does not offer a credit card, or if you are unable to qualify for one, your next option is a secured credit card. To get a "secured" credit card, you have to pay a security deposit to serve as collateral, in case you decide to skip town on your loan. Most secured credit cards carry an annual fee, and they set a minimum deposit (from $99 up to $5,000, in our research) for you to set up an account. Here may be the perfect card for you, since they guarantee approval. What to look for: Reasonable terms. At least as reasonable as you can get. Rates may be high -- 20% and up -- so don't carry a balance if you can help it. Watch out for: Everything, really. This market is filled with scams. Even legitimate lenders in the subprime business are considered bottom-feeders among their peers. Watch out for particularly abnormal fees. Some lenders charge application fees, monthly participation fees, program fees, and annual fees. We've seen lenders charge $300 and more in up-front fees, then turn around and offer you a credit card with just a $300 credit limit -- with all the fees already charged to the card. That means customers must pay off the fees before they can even start using the credit line for purchases! No matter what your spending habits, there's probably a credit card that best suits your needs. Published: Tuesday 7th of October 2008 11:16:30 AM For more information on credit cards and related topics, please see our library of articles. 
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