How to find the right credit card for you?

There are several factors to consider when choosing a credit card, like its characteristics, world wide acceptance, annual fees, and more.

Interest Rates
These fees determine the costs you will pay for your card through time. The Annual Percentage Rate (APR) is the annual percentage you pay on pending balances, as interest. Financial charges are the amount you pay for using the money you borrow. The interest is carried on as a percentage of your pending balance (purchases and charges are reduced by payments and credits made).
Rewards
Rewards programs can raise the value of debt and credit cards. A reward program generally consists of accumulating points you gain shopping or on other transactions you use your card for. These points can be exchanged for incentives, including different products and services, air tickets, vacations and more. 

Annual Fees
Most card issuers apply an annual fee to help compensate the expenses they have to maintain the accounts. 

World Wide Acceptance
An important aspect of a card is its acceptance.

Credit costs

Miscellaneous fees
Some card issuers require an annual fee (an amount you pay to obtain a card and to renew it every year). In some cases, banks also apply their fees. That is why it is important you read your contract carefully, so you are aware of terms and conditions. 

Interest
When you use a credit card, in fact, the issuer bank is lending you money in the amount of your purchase. That being the case, the bank applies a fee called interest, for using their money. 

• You should start paying your loan as soon as your statement arrives in the mail.
• Interest can be avoided by paying out your balance during the time stipulated by your account, which is the “payment due date.”
• The faster you pay out your balance, the lower will be the interest paid.
• Make sure you are informed about the terms and conditions of your credit card.

Method used to calculate interest

Banks use different methods to calculate interest; it is your responsibility to be informed of how your bank does it.
Your credit card interest may be calculated by day or by month. If you don’t pay out your balance, interest will be applied to the unpaid balance, or revolving balance and it will be incorporated to the total amount owed. When that happens, you pay interest over interest, which is also called compound interest. If you have a high balance, paying the minimum would be a costly way to use your card. 

Method to calculate pending balance

If your grace period expires and you still haven’t paid out your credit card, any new purchase will be immediately included in the total balance and will start to accumulate interest from the date of purchase. 

Financing charges

Credit companies enforce a fee in exchange for allowing to transfer a balance from a month to the other, they are called financing charges.  You can avoid having them over your purchases by paying out your balance monthly. However, if you pay anything less than complete balance, a financing charge will be incorporated to your account. If your balance is transferred from a month into the other, financing charges will be increased. 

Where do financing charges come from? 

They are calculated in a number of ways. Your statement describes the method applied to your account. Generally, your financing charges are based on one of the following methods: 

Average Daily Balance: the card company incorporates the amount outstanding from your last balance (if it wasn’t paid off) to all your new purchases and cash dispositions, and then it divides the amount by the number of days in the statement period. All months you use the card appear in your statement.
Adjusted balance: The card company takes your balance in the beginning of the statement period and deducts the payments you made during the period; which means your balance remains low, and you pay less financing charges. 

Previous balance:  This method applies the financing changes to your beginning balance for the statement period ahead. Purchases and payments made during the following month won’t be included.

Final Balance: The credit card company could use your final balance for the statement. If that is the case, purchases and payments made during statement period would be included.