Picking the Best Credit Cards for Different Needs

American credit card users have endured so many years of credit limit tightening, rising interest rates and fee after new fee now that you could forgive them for wondering if they need to bother with using plastic anymore. The thing is, the new CARD act has changed a lot about what credit cards can and can’t do. Bank cards are no longer what they used to be even a year ago. The credit card is now a far more sensible spending tool than it has been over the last 10 years, thanks to the new legislation. Still, even if the card companies aren’t allowed anymore to raise their rates in a stealthy manner, nothing stops them from raising them openly. And this, they have done. Interest rates are up 3% over the last year. Your typical $3000 bank card balance now is going to cost you about $350 in interest over the life of that loan. But one good thing about the credit card scenario today is that you have lots of choice. No longer are you forced to live with just the one or two bank card companies that will have you. The banks are sending out 4 billion card offers this year alone. And these are the best credit cards anyone has seen in 20 years. You get better terms, better rewards and easier access to credit. Let’s look at a few of the best credit cards there are for you today, depending on what it is that you wish to achieve with your card.

Let’s say that you have a serious amount of debt on your bank cards – about $8000. In today’s credit card environment, managing credit card debt requires that you go with at least two separate cards. One card, you keep for the balance transfer offer that it gives you. And the other, you maintain for the low interest rate that it offers you on purchases. The best bank cards for balance transfer these days offer you one and a half years at no interest and a 2.5% fee. The Citi Diamond Preferred card is a great example of such a product. Discover More is another great choice for those who wish to manage debt. If you have excellent credit and you would like the option to carry your balance forward, the Simmons First Platinum Visa card offers you a reasonable 7.25% APR.

For students, the best credit cards are far more difficult to come by. The new law requires that anyone under 21 needs to bring in a cosigner to apply for bank card. Since major card companies like American Express and capital One don’t accept any kind of co-signing deal, the other companies that do allow it feel free to raise their interest rates to 25%. The new bank card law makes it possible for a card issuer to skirt this requirement. They allow the card issuer to treat student loans as if it were independent income. Anyone with independent income, even if they happen to be under 21, can apply for a bank card. The only problem there is that the bank card issuers will then give the students a massive spending limit that they can never expect to actually repay. But there are some pretty good offers that several credit card issuers have specifically designed for students. The Citi Platinum Select Visa Card for College Students gives college students extra points for an impressive GPA; the APR is under 21% and you get rewards for staying under your limit. Bring in a cosigner, and you get a low 12.5% interest rate.

The 5 Best Credit Cards for Teenagers

Having a credit card is a big responsibility. The way you manage credit can greatly influence your credit score, which impacts whether you qualify for loans. Given the level of responsibility, you may hesitate giving your teenager a credit card. Teenagers often shop frivolously and this behavior increases their risk of debt. To avoid debt problems, you might suggest a prepaid card. These cards teach budgeting and self-control, but they are not necessarily the best credit cards for teens.

A prepaid credit card is a type of debit card. These cards do not build credit because teens can only spend what they deposit on the card. An actual credit card in your teen’s name can help him or her establish credit at an early age. If you are searching and comparing the best cards for teens, here are five options.

1. Citi Dividend Card for College Students

Earn bonus cash back on rotating categories each quarter, such as dining out, groceries and entertainment. Plus, 1% cash back on all other purchases. Online account management lets you monitor your spending and pay bills online. Enjoy 0% interest on purchases for the first seven months. There is no annual fee.

2. Journey Student Rewards from Capital One

Apply for this card and access your credit score monthly. Set up text or email alerts to receive payment and balance reminders. Earn 1% cash back on all purchases, plus a 25% bonus whenever you pay your bill on time. There is no annual fee.

3. Discover It for Students

The best credit cards feature bonus perks, such as no annual fee, no over limit fees and no foreign transaction fee. This student card has all these features and more. Earn 5% cash back on rotating categories throughout the year, and 1% cash back on all other purchases. Use the card for books, food, transportation and more. The more you use your credit card, the more opportunities to earn cash. Choose your own due date, and with $0 Fraud Liability, you’re never responsible for unauthorized purchases. Enjoy 0% interest on purchases for the first six months.

4. Capital One Secured MasterCard

This card has no application or processing fee. Submit a refundable security deposit up to $3,000 and receive a comparable credit limit. Capital One reports to the three major credit bureaus monthly, which helps build your credit faster. Make timely payments and qualify for credit limit increases with no additional deposit. Demonstrate a good credit history over time and you may qualify for an unsecured credit card with Capital One. Use this card wherever MasterCard is accepted. There is a $29 annual fee.

5. First Progress Platinum Select MasterCard

Get approved for this secured credit card with a security deposit between $200 and $2,000. There are no credit history or credit score requirements, which is perfect for first-timers. Deposits are fully refundable, and you can request your deposit anytime after paying off your balance. Credit activity is reported to the three bureaus each month and you can access your account online 24/7. There is a $39 annual fee.

How to Know Which are the Best Credit Cards

In order to determine whether or not you are getting the best credit card deal available, you should be careful to read all the fine print detailing how your card will work. Some people find this research “boring” as well as time consuming, but becoming familiar with the terms, conditions and costs is important before you sign up for a card and may save you time, money and grief from possible financial penalties incurred after the fact if you are not fully aware of the guidelines of your best credit card.

Some cards have an annual fee. However, if you only want a low rate credit card with no frills, there is no reason to sign up with a company that charges you a yearly fee. Some popular, high end credit cards provide rewards and perks though in exchange for an annual fee and you should weigh these offers carefully.

What is the card’s APR? If you carry a balance, the lower the APR (Annual Percentage Rate), the less money you will pay on the best credit card. If a credit card comes with a very low introductory rate, you should know how long this rate will last. You should also calculate whether you will be able to pay off your card balance before this “teaser rate” expires.

Fixed rate credit cards are initially more desirable than cards with variable APR because the interest rate does not change each month or each quarter. When you sign up for a card with a fixed rate of 11.99%, for example, it is likely you will be paying this rate for quite a few months. However, you should be aware that fixed rate APR is also liable to change. Federal law permits card issuers to make changes at any time as long as they provide notice to card holders before the new rates take effect. A notice period of only 15 days is required though.

Interest on variable rate credit cards fluctuate with an index. Most card issuers use the Wall Street Journal prime rate as their index. Variable rates – which can change every month of every quarter – are used by approximately 70% of credit card issuers.

Some variable rate credit cards have minimum APRs, which are also known as floors. No matter how much the Fed cuts, once your credit card hits its floor, it will not go any lower.

It is also important to be aware of the length of your credit card’s grace period which is the time from the statement date to the date when your payment is due. If your payment is made in full by the end of the grace period, you are not charged any interest. If you only make a partial payment, interest begins at the end of the grace period. Many credit card companies have decreased their grace period from 25 days down to 20 while some companies do not allow any grace period at all.

When you have done your homework and found the best credit card that appears to be desirable to you, make sure you have checked their penalty policies before you make the commitment and sign on the dotted line.