How Do You Use Your Credit Cards?

Credit card features vary widely, so you need to think about how you use credit cards in order to find the right card for you:

• You pay off the full balance each and every month. In other words, you treat the credit card more like a charge card and use it as a convenient way to pay for purchases and to manage your cash flow. A no-fee or low-fee card will appeal to you the most, as will various common credit card features like points and purchase insurance.

• You carry a monthly balance. You use the credit card for short-term financing. In this case you want a low APR.
• You regularly borrow money using cash advances. You treat the credit card as a longer-term financing tool, much like a line of credit. The interest rate on cash advances (which is often higher than the interest rate charged for purchases) is the most important factor by far.

You simply can't choose the right credit card without knowing how you'll use it.