Credit Cards

Not all credit cards are alike. That's why it's important to carefully review a card's terms and costs. In general, if you expect to pay your card bill in full each month, your best bet is a card with no annual fee and with the kinds of rebates or rewards that fit your lifestyle. It’s also good if the creditor grants you a 'grace period' before incurring interest charges. With cards that have no grace period, you always pay interest, starting from the date of purchase.

If you don't expect to pay off your card balance in full most months, go for a card with a lower Annual Percentage Rate (APR) and the right mix of rebates or rewards to justify any fees. Also, if the card has a low, introductory interest rate, be sure you know when the new, higher rate will take effect and what that rate will be. And credit cards with offers of "zero-percent interest" on purchases for a certain amount of time could end up being more expensive if you don't pay the balance in full by the expiration date.

For balance transfers, make sure you know all the details and terms of the transfer.

Be aware of all fees. For example, credit cards that offer generous "rewards" (such as points or cash back) may have high annual fees. Rewards cards may temp you to overspend just to earn the points.

Other fees to think about include late fees, over-the-limit fees (for transactions that would put you over your credit limit), and balance transfer fees.

Source: FDIC