Choosing a Card

Is it a convenience?

Many consumers choose to pay their credit cards in full each month. They use credit cards as a convenient way to track their spending and to make purchases without using cash or checks.

For these card users, the interest rate on a credit card may matter less than the size of the annual fee and the rebates they can earn when they use the card. Cardholders who pay the balance in full each month might want to consider a co-branded card. These cards may have relatively high interest rates, but if you pay your bill in full, these rates may not affect you. These cards also provide such extras as rebates, cash rewards, and free or discounted merchandise. But be aware that the extras may not last the lifetime of the card.

Think a rebate card might work for you? Read the offers thoroughly to find out how much you have to charge to earn rebates. If you don't think you will charge enough within the specified time to collect rewards, the higher interest rate and annual fee might not be worth it. Also, check whether the company charges interest from the date of the transaction. If so, those high rates may cause you to pay interest on this type of card, even if you pay your balance in full every month.