Is a Credit Card better than a personal loan? Well, strictly speaking a credit card is a form of personal loan although interest is paid only on the balance that has accrued. Everyone in business knows that having adequate cash flow is vital to the life of the business. The same could be said about our personal lives. If the cash runs dry where do we turn for assistance? Having a card on hand can be useful for getting through periods where we seem low on cash as long as we know money is coming down the track. Not all credit cards are created equal, however, and some will fit your personal situation much better than others.
There are many kinds of credit cards with various rewards. There are cards for big spenders, cards for travelers, professional people and students. Some cards like the American Express Platinum Card have a very high annual fee, $450 in this case, but they offer fantastic rewards. The rewards are only worthwhile if you earn enough to cover the annual fee.
Other cards, such as the United Mileage Plus Credit Card reward those who like to fly. If you travel a lot for work or holidays then finding a card that provides free travel insurance and rewards you for every ticket you purchase can be worthwhile. You might find you are able to earn enough rewards throughout the year for a free flight or hotel stay. The United Mileage Plus gives you a free baggage check-in which is a saving of $50 per flight, on top of all the other mileage rewards.
The Chase Sapphire Card is also great for flyers as it has numerous travel benefits. It also comes with free travel insurance and has no annual fee.
Some cards accrue no interest for a certain period of time. This can be really handy if you are transferring a large debt over from another credit card. Usually the interest free period is one year but can be longer such as with the Chase Freedom Credit Card which has a zero APR (Annual Percentage Rate) for the first 15 months. You also receive $100 cash back just for signing up!
Finding the best credit is not as simple as looking for the card with the lowest rate. You must compare the benefits of each card with your current situation and see how those benefits will affect you. If you like cash rewards look for a card that offers cash backs. If you like to travel find a card that rewards you for traveling. Interest rates become a factor if you can’t pay off your card from month to month, something to bear in mind.