When applying for a new credit card, researching, and comparing one card to the next is a serious undertaking. The tool must accommodate your needs and fit your lifestyle without incurring a host of fees and charges.
Determining the purpose for obtaining the card is a priority whether you are a travel enthusiast, intend it for daily use, or want to establish a credit profile.
For instance, when looking at the Chase Sapphire Preferred vs. Amex Gold, each is an excellent median-tiered card, with annual fees balanced by the benefits, solid reward programs, and sound earning rates.
One leans more favorably toward superior travel rewards, while the other boasts outstanding dining and supermarket rewards. Finding the one most suitable will involve researching the distinct differences, learning the variables with each, and seeing how this impacts you. Let us consider factors when comparing credit cards that allow a more informed decision.
What Factors Contribute to Selecting the Best Credit Card
Looking at two comparable credit cards like the Chase Sapphire Preferred vs. the Amex Gold, you should discern which would most suit your needs and fit your lifestyle or answer to the purpose of getting the card.
Narrowing cards to a select few is a matter of establishing where your priorities lie. Is it travel, basic daily use, or do you want to build credit? In addition, you will need to consider the costs associated with the cards and how these compare with the associated benefits. Learn about the credit card tier system at https://powerfinancetexas.com/blog/the-5-levels-of-the-credit-card-tier-system/. Let us look at the standard features preferred on most cardholder checklists.
- The annual percentage rate (APR) is a primary consideration for most consumers.
The recommendation with many financial advisors is that consumers keep credit card balances low to repay the debt in full as the invoices come due each month. If a cardholder maintains this habit, there will be no interest accrual or APR (interest inclusive of fees) to contend with.
The APR is only attached if a balance Is carried over from one month to the next. Another helpful hint is to check your credit score before applying for a card. Issuers will offer a lower rate to those with an excellent credit profile.
If you have less-than-average credit, look at rates among cards that fall within your credit range. Determining the policy on delayed or missed repayments is also wise to learn whether a late fee will be charged, or the APR will increase.
- The fees attached to the credit card need to be disclosed.
Some cards come with various fees aside from interest charged on an annual basis. Often daily-use cards come without an annual fee, but rewards and cards to help individuals establish credit tend to have this charge. The charge usually offsets the value beyond the lending power of the card itself.
Many cards are available without annual fees, but in looking at what could be outstanding benefits, you might overlook this charge or other costs associated with a card.
However, paying attention can save considerable expense, especially if the issuer attaches charges readily for any misdeed like late fees, over-the-limit charges and on, returned check costs, and on. Some cards will expect a foreign-transaction fee, a percentage of each purchase when using your card internationally.
- The perks and rewards associated with the card are a plus.
The sign-up or welcome bonus is a key factor for many people accepting credit card offers. While these can provide great rewards, they are contingent on a certain amount charged to the account within a set period of time from card activation.
The benefits associated with a credit card are how the cards start to become distinct from the others. Usually, a card will accumulate rewards when you make a particular purchase or use it in a specific scenario. You will either gain miles, points or receive cash back.
- Cash back: A cash back card issues a percentage of the money you spend on an item back to you. The amount you receive back will depend on the type of card you choose.
- Points: Points come with the amount you spend, so many points percent, with some purchases earning more than others. You can redeem the points reminiscent of a cash-back system or do so for gift cards, travel, or merchandise.
- Miles: Comparable to points, miles accrue with purchases, and bonus miles are possible based on the type of purchase. Typically, miles are associated with a particular airline. The possibility of a free flight exists when cashing in miles with many people traveling extensively using credit card travel benefits. Click here for details on how to “travel hack” with your miles and points.
Final Thought
Before you decide between the many credit cards on the market, such as the distinctive Chase Sapphire preferred vs. Amex Gold, the primary question you should consider is why you want it and what you need to get from it.
One thing to note with cards that provide a benefit is there will likely be an annual fee and an increase in the APR since they offer more than lending power. If your goal is to establish credit or have a daily-use card, a focus might be better placed on the cards that do not have this charge.
Finally, when comparing your creditworthiness will be a consideration for the issuer regarding the APR they charge. It is necessary to review your score and history before comparing options to avoid those outside your range.