Reader Mail: How Do I Compare Credit Card Offers?
Now that I have a stable job and am geographically rooted for at least a few years, I decided to move all my money out of Wells Fargo and into a local credit union. It’s been totally awesome so far (no ATM fees, no minimum balance/charges on my checking & savings accounts, etc). The only thing keeping me tied to Wells Fargo at this point is my credit card. It was one of those cards opened during college for “overdraft protection” on my checking account, and (up until post-grad school unemployment) I had always used it pretty responsibly/sparingly, so I never bothered to get a different one. I’d like to sever ties completely with WF and transfer my balance (about $700–800) to a new card, but I have no idea how to choose one! Any tips/suggestions on how to compare card offers and get the best deal in terms of interest rates, reward programs, etc? — Saralyn
I pulled Saralyn’s question from the depths of my inbox because I promised her that I would after my column about credit cards went up earlier in the week. Since I am adverse to signing up for new credit cards, I’m going to tell you what experts have told me, but if there are readers out there who have had really great experiences with a certain card, please tell us in the comments section.
Saralyn, if you use your credit card sparingly, and are not the sort of person who has a credit card for the rewards, you should look for a card that will offer you a 0% APR for your balance transfer for at least 12 months, with no annual fees. You should also make sure that the transaction fee for balance transfers is low. The standard balance transfer fee for credit cards is 5%, which means you might have to pay $40 to transfer your balance of $800, but you might be able to find cards with transaction fees of 3% or lower. Having a 0% APR for at least a year is great if your goal is to pay off your balance, and then keep your balance at 0.
But if your goal is to pay off that balance, and then become the sort of disciplined person who pays off her credit card in full every month, you might as well get a card that offers airline miles, cash back on purchases, or other rewards.
So how do you go about choosing a card?
First, I’d recommend that you check out Bankrate’s feature on credit card basics — it’s comprehensive, and will explain to you things like how credit card fees work, and what kind of card you should look for based on your lifestyle.
You can use Bankrate to look at cards, but Billfold pal Arielle O’Shea uses NerdWallet to compare credit card offers, and I also think NerdWallet is a great tool to compare cards. The site asks you what kind of card you’re looking for, and if you’re the sort of person who carries a balance, pays everything in full, or has bad credit, and it matches you up with the cards that are best for you.
Here’s what Stephanie Wei from NerdWallet tells us in an email:
“We provide customers with a much larger population of results, often compiled either through a painful process (for example I dare you to try to look for checking fees by banks; it’s very difficult due to how poorly fees are disclosed), or through some awesome programming we wrote ourselves. Most competitors out there only list stuff they get paid for, and you’ll see that we search through way more products for consumers (for example, we search through 1,600+ credit cards, most competitors only look through less than 100).”
So! The two key things to look out for: the APR and annual fees. If you know you’re going to carry a balance every month, focus your credit card search on finding the one that will offer you the lowest rate possible.