Credit Card Offers all Seem alike - What are the Differences?
Typical APR 12.6% says one credit card offer. So does another. And a third. If you look further, you'll find credit cards that offer cash back on your purchases, reward points to spend on things that you want, airline miles to use when you travel, discounts on memberships and purchases at various merchants and clubs - after a while, all the credit card offers made by the UK credit card companies start to look and sound the same. Are there really any differences?
When you count in all the vanity, charity and branded credit card UK companies offer to their customers, there are literally hundreds of credit card offers that you could choose from if you're looking for a new credit card. At a surface glance, they all seem to be offering the same advantages and benefits - or at least, each type of credit card seems comparable with others of its type. Whether you're looking at Maestro, Mastercard, Visa, Virgin, the Egg card or any one of the others, the interest rates are within hundredths of a percentage points, the cash back offers are nearly identical, even the airline miles offered from one card to the next are the same. So really, what's the difference?
If you're looking for the differences between the offers made by one major credit card company and the next, they're generally slight and subtle, but they can make a big difference in how much you end up paying for the privilege of carrying one card in your wallet over another. Differences like the number of days grace period you have between making a purchase and starting to accrue interest, or whether interest is calculated on your beginning balance or your ending balance may seem small - particularly when you're looking at the month to month expense. Choosing the credit card that most closely meshes with your personal spending habits, though, can save you a great deal of money over the years that you'll hold that card. Because the credit card companies can afford to take the long view, a tiny difference like a tenth of a percentage point in interest can make a huge difference in their profits. They bank on you taking the short view and thinking that a pound or two here or there doesn't make much difference at all.
Even so, if you've already decided on the type of credit card you want - a balance transfer card or a rewards card, a cashback card or a charity card - then the company you choose is far more a matter of personal choice than ?the best credit card'. You may decide, for example, that you want a Visa card because your favorite football club offers a branded Visa card and gets benefits whenever you use your card.
If you compare credit cards with others offered by the same brand, though, the differences are far more significant. Then the differences between a cashback card and a rewards card, a low APR card and a gasoline rewards card become very evident. That's why it's important to check the particulars on the credit cards you're considering carefully. A rewards credit card? Which merchants will you be able to spend your points with? Do they offer merchandise you'll buy? Cash back credit card? How is the cashback paid? Do you get a cheque once a year? Deduction from your account balance immediately? Do you have to ask for your rewards or are they automatic? All of those subtle differences can have not so subtle effects on your finances over the long term.
The best advice when you're looking for a new credit card is to take the time to study your own shopping and spending habits carefully first, then compare credit card offers at moneyeverything.com to find the credit cards that suit it most closely.