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Credit Cards – page 2/2 – choose the right one

How to choose the right credit card

 

Two Cards?

Does it ever make sense to have two cards, even though you’ll pay two lots of annual fee? The answer is ‘yes’… sometimes. If you have a rewards card for your regular purchases but pay the full balance off every month, you can earn reward points and take advantage of the interest free period…

…but say you decide to take that holiday…

Let’s say you expect to rack up $3,000 and pay it off gradually over twelve months. This means you’ll be borrowing an average of $1,500 and at typical reward card rates of nearly 20% you’ll pay around $300 in interest, but if you use a low rate card at say 14%, you’ll only pay $210 in interest.In this case the $90 difference is probably more than the annual fee for the low rate card. …And you get to keep your interest free period on your reward card – which you loose if you don’t pay off the full balance every month.

“Up to 55 days interest free!” – reading the fine print

Actually the fine print says 25 days from your statement date,

…so its 55 days only for what you buy the day after the statement date

…better to think of is as “at least 25 days interest free”

…and be warned – 
if you don’t pay the full balance by the due date you lose your interest-free period for all purchases.

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