Evaluating Credit Card Offers

If you're anything like me, you get two or three credit card offers a day from banks and companies all over the country. I don't have any special background in financial planning, but as I've read up on credit card offers and tried some out myself, I've come up with a few ways to sort out the good ones from the bad. What follows are some of the points on the credit card offer evaluation rubric I tend to use. You may have heard these before- there's not much new under the sun. Hope you find some of these concepts useful.

Happy anniversary! Check for an annual fee. I usually do this first when I am evaluating a credit card offer because it takes the least amount of time to process. You're going to charge me fifty bucks, seventy bucks, a hundred bucks a year to use your credit card? No thanks, I think I'll go elsewhere. Annual fees can be a real kicker if you're on a budget or if you don't realize you're being charged until after you sign on for the card. On the other hand, if the credit card offer has other features you really like and you go in knowing you can afford the fee, more power to you. For me though, with so many cards not including annual fees, the appearance of one is a deal breaker.

Now you see it, now you don't.Check the introductory APR and the rules for keeping it. Credit card offers these days are great about offering low interest rates to new customers. That's what lures many of us in. I transferred a balance last year from a card that was crushing me with fees and interest, and I felt like I had a new lease on life. You need to be careful, though, when taking a low APR credit card company up on its offer because often, rules apply. For many cards, if you're late even once with a minimum payment, the rate bounces right back to a "normal" rate of 13, 17, 23% even. This isn't necessarily a bad thing if you're good about always paying on time. If you're not good like that, there's not a lot of point to taking up a low APR offer that you're going to watch jump in a few months to maybe a rate worse than where you began with a previous card.

Also, interest rates on balances don't always apply to other debts on your card. Some credit card offers give you a low balance interest rate, but then hike it up for things like like cash advances and balance transfers or have more stringent rules about when those other rates can increase. So, if you plan to transfer a balance or borrow cash (don't do it!) make sure to know what each credit card offer says about these things.

What if I miss a payment or go over my limit? This is important to know before you sign up for a credit card, too, because, as we all know, credit card companies don't just bump up your interest rate if you miss a payment, they also charge you a late fee. And if that late fee happens to put you over your credit limit, they'll get you for that too. Look at the fine print about extra charges, even if you always pay on time.

Thank you for giving us $3000 of your debt. That'll be $100, please. Check the balance transfer fees. I was so excited to transfer one of my biggest credit card balances to a low-interest card, but surprised when the company making me the offer said I had to do so right then, as I was signing up over the phone, or I'd be charged a hefty fee when I later tried to make the transfer. Check each credit card offer for balance transfer fees (sometimes several hundred dollars) and when they apply. You may not have any, or you may be forced to decide on a transfer as soon as you sign up for the new card like I was to get the free transfer deal.

Don't forget the golden rule. What is the golden rule of credit card offers? They're not trying to help you out. I know, it looks so nice: low rates, no fees: " Let us save you from those mean cards that harass you when you're late with a payment!" But the reality is, credit card companies are in it for the money- your money. Some may be more fair, customer-friendly, or easy to use than others, but ultimately, they exist to make money off your debt. So beware of special "security plan" offers, items you can by upfront with the card, information sharing they do with their subsidiaries, and how quickly that wonderful four-digit credit limit they gave you can turn against you. Be smart. Protect yourself and your finances, and remember, bottom line, credit card companies may cut you a good deal from time to time, but their main interest in you is how you can help their bottom line.

So, good luck sorting through your mail tomorrow, checking out those offers that have found their way to you from 1st National Bank of Mars and CaptialTwo of Greater France. Just be sure to read the fine print and find the best offer for you.