Five Things to Consider in Choosing a Credit Card
Published: 07/15/2025
Read Time: 3 min
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There are several important things to consider when taking out a credit card, including the card's interest rate, fees, rewards program, and other features. Some of the most important factors to consider include:
1. Interest rate: The interest rate on a credit card is the amount that you will be charged for borrowing money. It is expressed as an annual percentage rate (APR), and it can have a big impact on the overall cost of using the card. When comparing credit cards, it is important to look at the interest rate and consider how it will affect your monthly payments and overall costs. As of the fall of 2023 the average interest rate is around 25%.
2. Fees: Credit cards can come with a variety of fees, including annual fees, late payment fees, balance transfer fees, and foreign transaction fees. These fees can add to the overall cost of using the card, so it is important to carefully review the fees associated with each card and consider how they will impact your finances.
3. Rewards program: Many credit cards offer rewards programs that allow you to earn points, cash back, or other benefits for using the card. These rewards can be valuable, but it is important to consider whether the rewards program is worth the cost of the card, including any annual fees or other charges.
4. Other features: Credit cards can have a variety of other features, such as 0% introductory APR offers, balance transfer offers, fraud protection and travel insurance. It is important to carefully review the features of each card and consider how they will be useful to you and whether they justify the cost of the card.
5. Repayment Terms: It's useful to review the minimum payment requirements of your credit card. Credit cards typically require a minimum monthly payment of 1-3% of your balance subject to a minimum dollar payment (e.g. $25). However, do NOT accept this minimum payment as it will generate an eyewatering amount of interest payments and you will never pay off the debt. Your bank will love you, but when your bank loves you, you should be worried.
Overall, when taking out a credit card, it is important to carefully compare the offers available and consider how they will fit into your overall financial plan.
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