The Good, the Bad and the Ugly of Comparing Credit Cards

With so many credit card applications streaming through the mail, it's often hard to get a handle on which ones are worth a glance and which ones should hit the shredder the moment they leave your mailbox. Wading through piles of credit card solicitations can be a daunting task, but with a little training in what elements should be targeted, consumers can cut through their options in no time.

Choosing a credit card can be a lot like shopping for a brand new car, a mortgage or even selecting a college. Research should be done on all facets of the decision, fine print and terms of agreement should be fully considered and the option with criteria that best meet a consumer's needs should be selected.

Employing the process of elimination may alleviate some of the stress involved with the decision making process. When attempting to select an appropriate credit card, gather all solicitations and applications into one bag or pile and go through them one by one, scanning for key words such as "annual fee," "APR" and "introductory period," to start. Consider the following questions to aid in your quest for the best credit card package:

Is there an annual fee?

Unless you are made of money, you may wish to avoid credit cards that require an annual fee. Be sure to read all the fine print, for some cards may not initiate the annual fee until the second year of a cardholder's membership.

What is the post-introductory APR?

Sure a credit card with zero percent APR sounds like a great deal, but how long does that zero percent last? Many times credit card companies offer teasers such as very low APRs to lure in consumers. What consumers may not know is that the APR often takes a steep hike into the double digits after an introductory period of six months or so.

For those consumers who pay their credit card balance off in full by the time it is due every month, the amount of interest charged will not matter as much as it would to someone who often carries a balance. By paying off your bills by or before their due dates, cardholders will save themselves from having to pay anything extra in the form of interest charges.

Does the card offer any rewards or perks in terms of special savings, cash back or free items or services?

Rewards programs and cash back incentives can really make or break a credit card sometimes, especially if its other features like interest rates and annual fees all level up with competitors' offers. Earning free flights, free hotel rooms, discounted products and services, cash back bonuses and other such rewarding benefits make a credit card with these incentives very enticing. But no matter how great the reward offers are, be sure to also consider the cold hard policies like APR and so forth.

Does the card offer free fraud and unauthorized spending protection, travel insurance or other similar services?

Though no one ever intends to fall victim to credit card fraud or identity theft, those evils are alive and out there. Some credit cards - especially those available for specific stores alone, like Eddie Bauer, Sears, Macy's and so forth - many times offer a specialized protection service for a monthly fee of $8 or so. This means, every month whether you use your card or not, you will owe $8 for the protection granted to your credit card. As the consumer and the cardholder, you want to be always aware of all charges and fees for which you are responsible - especially if they recur month after month regardless of your spending habits!

Before signing up for the first credit card that comes through your door, consider these factors to find the best fit for your spending and saving styles.

- Annual fee

- Post-introductory APR

- Member benefits and services offered

Once you have determined which credit cards offer the best interest rates, reward programs and other perks, begin discarding the offers you can easily refuse. Cards imposing annual fees may not be as enticing as cards that require no annual fee and offer a rewards package. Keeping in mind your own spending habits and financial behavior, select the credit card that best suits your needs. If you can work a reward or cash back bonus into the plan, go for it!