Are you ready to get your first credit card or maybe thinking of getting a new one? If so, then here’s a guide to help you choose the right credit card for you. Don’t just fill out the first application form that’s been handed to you nor accept and use that pre-approved credit card that you received in the mail. It’s important to take the driver’s seat and actively select the one that can provide the products and services you need and gives the rewards and incentives that benefits you the most.

Before anything else, be sure that you are prepared mentally and financially to own a credit card. I suggest that you first read my previous article, Things You Ought To Know Before Applying For A Credit Card, to have initial guidance and a proper mindset on why you should get a credit card.

So are you set to gain some financial leverage? Here are some key points you should consider and a few tips you should follow when choosing a credit card.

Familiarize yourself with the jargon and how credit cards work
Before inquiring and talking to an agent, make sure you don’t get “lost in translation”. Have ample knowledge and understanding about the world of credit cards. Although bank representatives will most likely be willing to explain to you these terms, it’s more advantageous to know beforehand so you’ll have more time inquiring about card details and less time asking for definitions.

Here are some terms to get you started:

• Finance Charge Rate – the interest rate that is applied to your balance if you fail to pay within the grace period. Multiply this by 12 and you get the Annual Percentage Rate. Philippine credit cards average around 3% for the monthly rate.
• Grace Period – the number of days where you can pay your credit without interest, sometimes referred to as the Billing Cycle. In the Philippines, the usual grace period is 30 days.
• Annual Fee – the amount you pay for maintaining the credit card. This is automatically billed into your card, usually as monthly charges. Normally waived for the first year. Averages at P100 a month.
• Credit Limit – the total amount you can spend. Normally based from your credit history and financial status as assessed by the credit card company.
• Rewards – benefits you can avail from being a member. Generally works as a point system which you can later exchange for free items and services. Other incentives includes discounts in partner establishments and cash rebates.
• Cash Advance Fees – the interest rate that’s automatically billed when you avail of a cash advance from your credit card. Philippine banks usually charge around 3%.
• Late Charges and Penalty Fees – the interest rate that is applied to your balance or a fixed amount that is added to your bill if you fail to pay the minimum required on or before the billing due date. This is higher than the finance charge rate and averages at 5%.

How are you planning to use the credit card?
Carefully consider how you intend to use the card. This is probably the most important factor to consider when choosing the right credit card. Here are some common uses for credit cards:

• For groceries and everyday spending – consider cards that have long grace periods.
• For buying expensive items – choose the one with low finance charge rates and those that offer deferred or installment plans
• For online shopping and transactions – get the one with internet fraud and consumer protection benefits

Do your research
After familiarizing yourself with how credit cards work and knowing exactly how you intend to use them, the next step is to collect information from banks and credit card companies. Start with your own bank, then inquire in those which are convenient for you to go to because after all, you’ll be visiting them regularly to pay your bills.

When researching information on the internet, make sure that you’re getting facts from an unbiased source (such as this site ). Additionally, when inquiring, make sure that you take note of all the fees, terms, conditions and the benefits which the credit card company offers so you can easily compare your options.

To help you start with your research, here are some local credit cards that have “low” monthly interest rates (thanks to la_ciudadista for sharing this in the previous article):

• BPI Express Credit Classic – 2.75%
• EastWest Bank Mastercard – 2.5% to 2.75% (lower rate applied to selected purchases such as groceries)
• Metrobank M’Lite Mastercard – 2.75%
• RCBC Bankard myDream JCB – 2.75%
• Most platinum credit cards also offer 2.75% interest

Consider getting a credit card with affinity but don’t use it as the main basis of your decision
Depending on your lifestyle, you may want to consider getting an affinity credit card. You’ll enjoy instant benefits from their partner companies. For example, if you own a car and would want to save money from your gasoline expenses, then you might want to apply for a BPI-Petron, a Shell-Citibank or other credit cards with affinity to fuel companies. If you frequently travel with Philippine Airlines, then the HSBC Mabuhay Miles Visa could be a wise choice.

This is, however, just secondary criteria. Your needs and how you intend to use your card is still the primary consideration in your selection process. Furthermore, don’t apply for a particular credit card simply because you want the rewards. Many credit card companies lure you with these bonuses and gifts just to get you on board. In the end, you might just end up with a card with high interests rates and that which does not fully complement your financial requirements.

How about you? Do you have a credit card? What made you choose that particular card? Please share your reasons by leaving a comment below. Lastly, I hope you’ll subscribe to Ready To Be Rich so you won’t miss my next article about credit cards. Thanks.

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Photos courtesy of pladys