The credit system used by companies that allow consumers to make credit card purchases is very complex. As a result, it may be confusing for many people when they try to choose between different cards. However, with some basic knowledge, you can make an informed decision. Below are a few different methods you can use to compare different credit cards.

Compare by Lowest APR

If you do tend to maintain a balance on your credit card, interest rates are going to become a big factor in how much you are being charged to use that card. This is why a great way to compare cards is by APR.

APR stands for annual percentage rate. This is the amount of interest that will be charged on a credit card balance over a year. An APR that results in a lower monthly interest rate means you will have to spend less money each month to maintain a balance on your card.

However, you should be careful to not be fooled by each low interest rate you see advertised. There is a difference between regular interest rates and introductory interest rates. An introductory interest rate is temporary. There are also fixed APRs and variable APRs. A variable APR could conceivably result in a higher interest rate being charged over the course of a year.

Compare by Rewards

Certain credit cards offer users a reward system that gives them incentives for certain kinds of behavior. For example, if you spend a certain amount of money on the card, you may end up receiving frequent flyer miles that could pay for a flight with a specific airline. The best rewards programs though tend to offer cash rewards. This way you can spend the money on whatever you want.

To obtain rewards, you will probably need to be putting a lot of purchases on credit. If you don’t plan on using your credit account often, you will probably not receive much out of the reward system. Still, it’s a good thing to consider when choosing a card.

Compare by Balance Transfer

Another thing you may want to consider is the balance transfer. A balance transfer happens when a new credit card account is opened for the purpose of paying off a previous credit balance. This allows your credit card debt to be transferred from one company to another.

There are good reasons to perform a balance transfer. For one, the new credit card company may offer a much lower interest rate on that transferred debt. If you wish to perform a credit card balance transfer, make sure that the new interest rate is significantly lower. However, there may also be balance transfer fees. Make sure these won’t wipe out your potential savings.

Shopping for a new credit card can be difficult due to the complexities of credit and credit card contracts. Overall, consider all factors when making your decision and always make sure to read the fine print to make sure you are fully informed.