Which credit card is right for you?

BY CATHY JETT

Credit cards have come a long way

since the 1900s, when gas stations and department stores issued the first ones.

You could use them at their locations, but nowhere else.

Today there’s a dizzying array available, from prepaid to low-interest to reward cards. There are even ones that can help people rebuild their credit, and some designed specifically for students and for health care bills, including those from the veterinarian.

So which is the right one, or ones, for you? The answer, as is true for so much in life, is: It depends.

Are you disciplined about spending and plan to pay off your credit card bill each month? Then you should consider getting a rewards card that offers such benefits as cash back, airline miles and/or gift cards.

The current top pick by CreditCards.com, a division of the Bankrate Online Network that lets consumers comparison shop for credit cards, is Capital One’s VentureOne Rewards Credit Card. It offers a one-time bonus of 10,000 miles once you’ve spent $1,000 in the first three months. That’s equal to getting $100 to spend on travel. After that, users get 1.25 miles per dollar on every purchase.

The standard rate for reward points is one for every dollar spent, but some cards offer more points for certain kinds of purchases or for certain purchases during a special promotion.

Beware, however.

While these cards sound great, they often have higher interest rates than other cards. The VentureOne Rewards card, for example, charges zero interest until next June, then the annual percentage rate, or APR, is a variable 11.9 to 19.9 percent. If you don’t pay each bill in full, you could wind up paying more for those perks than they’re worth.

What if you want a credit card for major purchases that you can only afford to pay off over several months? Check out cards with a low APR. CreditCardGuide.com, another Bankrate property, recommends the Capital One Platinum Prestige Credit Card, which currently offers a zero percent introductory APR through September 2013. After that, it will be a variable 10.9 to 18.9 percent APR.

If you’ve already amassed more credit-card debt than you can pay off in several months, then you should look for a card with a zero-interest transfer offer. CreditCardRatings.com, the website of a for-profit organization that educates consumers about credit cards, recommends the Slate Visa from Chase.

It offers a zero percent introductory APR for 15 months on balance transfers during the first 30 days your account is open, and there’s no balance transfer fee. After that, the fee for balance transfers is 3 percent of the amount transferred with a minimum of $5.

What if your credit score has fallen so low that you despair of qualifying for a credit card? You have two options: a secured credit card, which requires a security deposit, and a prepaid card, which is accepted as and acts like a credit card. It eliminates the risk of running up credit card debit because you pay for it upfront.

CreditCards.com and CreditCardGuide.com both recommend Capital One’s Secured MasterCard, which offers free access to its CreditInform program. This gives users such tools as a monthly credit score so they can track how it changes over time.

For prepaid cards, CreditRatings.com likes the UPside Visa, which doesn’t require a credit check or activation fee. It does assess a monthly fee of 99 cents if $500 is loaded onto the card each month. Otherwise, the fee is $4.95.

Students used to be inundated with credit card applications when they were in college. The Credit Card Accountability Responsibility and Disclosure Act of 2009, better known as the Credit CARD Act, changed that when it went into effect in 2010.

Today, students under the age of 21 who want a credit card must have enough income to satisfy the credit card company’s requirements or get a co-signer. Another option is to become an authorized user on a parent’s credit card.

CreditCardRatings.com gives top marks to several offerings from Discover, including its Student Clear Card and Mix Tape Student Card. Both have no annual fee, and users are not responsible for unauthorized charges.

For huge medical bills that aren’t covered by your health insurance or for vet bills, a CareCredit card may be a good option. Users can avoid paying interest if they opt for a shorter term plan, which ranges from six to 12 months; make minimum payments; and pay off the bill by the end of the promotion period.

Or they can get a fixed rate for a longer period. Purchases of $1,000 or more are eligible for a 24-, 36- or 48-month offer, and purchases of $2,500 or more are eligible for a 60-month offer.

Cathy Jett: 540/374-5407

cjett@freelancestar.com

Permalink: http://news.fredericksburg.com/business/2012/06/20/which-credit-card-is-right-for-you/