Image courtesy of Sean Macentee

Picking a credit card is not as easy as it might seem. You may just have a card which your bank issued you or you may not have one at all. It is worth giving some thought though to whether you want a card and if so which type is the best for you. If you are the type of person that could easily spend a lot of money on a credit card and not pay much of it back then it is best to steer clear as you will find that you are getting into a lot of debt. However, many people are not like this and will feel happy getting themselves a credit card.

There are many companies that offer credit cards and there are a selection of different types to choose from. You can get zero interest cards, cashback cards or standard cards, for example and it is important that you know what the differences between the cards are so that you can make the best choice for you. Think about how you will be using the card so that you can choose wisely.

If you like the idea of making some extra money from a credit card then a zero interest card can help. Many people take them out and then use them for all purchases, only paying off the minimum. The money they would have used to pay for the items is saved up in an account earning interest. Then when the interest free period runs out, which tends to be anything from 6 months to a few years, it can be repaid in full and the owner will have made money form the interest on the savings account. With interest rates so low at the moment, the amount of gain will be pretty small but it is still more than you would get if you did not do it.

A cashback credit card is another way of getting money back on what you spend. These will give you a certain percentage back on what you spend and deposit it in your account so that it offsets the following months bill. There are also similar cards that reward you with loyalty points, airmiles etc and you can spend them too. These can be a great bonus but the interest rates on these cards are higher than standard cards. This means that if there is any chance that you will not pay off the full balance each month, then you will be better off not getting one of these cards with the higher interest. In fact it is probably safer not to get a card at all.

If you want a card but know you may not always be able to pay off the full balance each month, then it is wise to look for the one with the lowest interest and therefore it will be cheaper to borrow the money. Even if you do get the cheapest, do try not to borrow though as it is still very expensive, even on a cheaper rate.