Whether you're applying for your first credit card or you've had one for a while and are wanting an upgrade, knowing the characteristics to look for in a good card can help you narrow your options. Of course, to get the best card, you're going to need good credit. If you're just starting out, you might have to decide which characteristics are most important to you, and which you can let slide.
If you know you're going to carry a balance on the card periodically, getting a low interest rate is essential. In addition, some cards offer special low rates on balance transfers, which is also important if you're going to be bringing a balance onto the card from another card. But, if you know you're never going to carry a balance, other characteristics of the credit card will be more important to you.
Credit cards can come with lots of fees attached. The easiest to spot is the annual fee -- but you can get cards without them. Other fees to check include late payment fees, over-your-credit-limit fees, cash advance fees and even inactivity fees. If the card has an inactivity fee, you get charged extra if you don't use the card. If you travel out of the country, look for a card with no foreign transaction fees.
Credit Limits and Grace Periods
Different cards are willing to extend different credit lines, so make sure that the card you get is going to have a line big enough for your needs. For example, if you just want to carry one card, having a credit line of $500 probably won't be sufficient. Along with sufficient credit limit, look for a card that has a grace period of at least 20 days to make sure that you have time after you get your bill to pay it in full and avoid paying interest.
If you're going to use a credit card, you might as well get rewarded for it. Different cards offer alternative ways to build up points and various types of rewards to redeem those points for. For example, some cards just offer a preset rate of cash back on all your purchases, while others give bonuses for spending in certain categories, like gas, groceries or restaurants. Other cards let you build up points to redeem for merchandise or airline miles.
Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."