by: Rudy Hadisentosa

Like any merchandise, you need to compare credit cards too before you actually decide on which one to go for. The selection of a credit card should not be based just on what is good, since there is nothing like a good credit card. Neither should it be based on the recommendations from a friend. The credit card that fulfils your needs is the one which is good for you. Something which fulfils someone elses need would not necessarily be good for you since everyone has their own needs. Moreover, do not get bowled over by all the offers being run by a particular credit card. A lot of them are just selling tactics and might not meet your requirements (and you cant keep changing credit cards each fortnight).

So the first step is to evaluate why you need a credit card. List down all your requirements and classify them as primary, secondary and tertiary needs. Next, search for the credit cards that fulfill most of your primary needs. Compile this information in the form of a list or a document. Now check these credit cards for what secondary needs they fulfill additionally. By this time you should have short-listed 2-3 of credit cards (or maybe just one). Finally use your tertiary requirements to solve the tie-breaker.

The following are the things that you should consider when comparing credit cards:

1. The APR: There is a short term as well as a long term APR. Short term APR is a marketing and sales tactic and is used to lure new customers into signing-up for the credit card. This APR is offered for a short term just after you sign-up for a credit card. So you should really be looking at the long term APR.

2. Additional benefits: These could be in terms of discounts at a particular store where you shop a lot or discounted car rentals or air fares etc. Again, based on your requirements these may or may not be of your interest

3. Annual fees: Of course, this is your outgo on credit card services and whether you use your credit card once in a year or 1000 times, you will always have to pay this fee. So it is a very important factor indeed.

4. Credit limit: For heavy spenders, this is a very important feature. Again, check your requirements before basing your selection on this feature.

5. Rewards program: Some credit cards offer very attractive rewards program. These are the points you earn for spending on your credit card. Once you have enough points you can barter them for goods or service and even frequent flyer m

6. Interest free period: If you are going to overspend on your credit card, the interest free period might be of particular interest to you.

7. Cash withdrawal fee/charges: These are the charges you pay when you withdraw cash on your credit card. So if you intend to use such a service, this will be of interest to you.

8. Forex conversion rate/fees: For people traveling overseas a lot, foreign currency conversion rates will make a lot of sense. Some companies dont charge a fee but have ridiculous conversion rates which compensates for the fee.

There could be a lot of different offers and you might be enticed to go for them. However, the key is not to get lured by such offers and to stick to your requirements when making a selection.