If you’ve taken time to compare credit cards online recently you should have worked out that all that glitters is not gold!
Owning credit cards in the past will probably have made you battle-hardened and you won’t fall easily for all the attractive “hooks” that are designed to pull you in and get you to sign on the dotted line.
But some newcomers to comparing credit cards are another matter. Here we identify a few of the honey-coated “traps” that people can fall into when hunting for their ideal card.
Gold or Platinum Cards
We think that most adults wouldn’t fall for credit cards that look good … but why do many still opt for gold or platinum cards?
Fair enough if you need a high credit limit, travel a lot and want to take advantage of the great rewards then perhaps the higher annual fee can be justified, but some people take one of these cards as a “status symbol.”
The Actual Credit Card Design!
The thought of choosing a credit card based upon its design is almost laughable to many of us – but it does happen!
Designs like Hello Kitty (see picture above) lure in the unsuspecting with cuteness value – that’s fine, but make sure that it doesn’t prevent you from checking interest rates, annual fees, interest-free periods, cash advance rates, balance transfer rates (if applicable) and other features that really matter.
Remember, when it comes to making your monthly repayments it doesn’t matter what colour your card is or whether it has diamonds and gold or Ferraris on the front!
Honeymoon Rates
Honeymoon or introductory rates can be a trap if you are not good at checking dates or managing your personal finances. You should steer clear of them unless you know exactly what you’re doing!
They are called “honeymoon” rates because they feel great at the time – maybe they offer zero interest for 3 or 6-months free credit! But people have a habit of forgetting when the introductory period expires and getting hammered with a high interest rate afterwards…cue a long, hard, baffled look at the credit card statement!
So beware and check out credit card deals thoroughly; if you have your finances carefully budgeted and plan to clear your balance every month then taking advantage of interest free periods is better than falling for a honeymoon rate credit card.
Great Rewards
The huge amount of unclaimed rewards would startle the most hardened of credit card experts. This tells us that great rewards schemes should not usually be a reason to opt for a certain credit card; it’s a perk or a nice add-on, if all the other features work for you, but should really be way down the list as there’s a good chance you’ll never use them anyway.
You have so many great resources now to compare credit cards online at leisure, in the comfort of your own home. There’s no excuse not to research thoroughly and consider all the best deals – and there’s no need to be sucked in by the glitter of advertising campaigns. Make smart choices now and it will help your personal finances in the future.
