Do You have the best credit card?

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The ability to finance real estate is directly related to the strength of your credit score. It's important to establish credit early and to use your credit responsibly. Therefore it’s important to shop around and compare offers to find the right card to avoid paying higher fees or higher interest rates than you have to. For example, to pay off a $3,000 credit card balance with $100 per month on a card with 18% interest would take 41 months to pay off with a total of $1,015 paid in interest. If you had a card with a 15% interest rate then you’d have the card paid off in 38 months after paying $738 in interest, saving $232.

 1.  How will you use the card?  You may plan to pay off your balance every month to avoid interest charges, but the reality is that few do this. If you already have a card, let your history be your guide. If you have carried balances in the past, or think it’s likely that you will, select a credit card that has the lowest annual percentage rate (APR). These cards typically do not offer rewards and no not charge annual fees. If you are consistent with paying off you balance every month, then focus on fees and rewards. Compare the value of rewards you expect to receive and the annual fee of the card.

2.  Know what to compare.  Sometimes an offer will list several APR rates. Would you still want the card if you had to pay the highest advertised rate? If you will transfer a balance from one card to another, compare the current interest rate to the rate you’ll pay over the life of the new card – not just the introductory rate. Check for a penalty APR and what would trigger it and how long it would last. Also check for fees such as a cash advance fee, a late-payment fee and an annual fee.

3.  Shop Around.  You might check what your own bank or credit union offers for credit cards or if you have a credit card and are happy with it you might check to see if the issuer will match or beat the terms and rates on a new card you are considering.

4. Transfer with Care.  Be aware that most credit cards charge a fee to transfer your balance. When you do move your account balance, don’t close your old account right away, continue to make minimum payments until the balance transfers.