Finance

A Guide to Selecting the Right Credit Card Company

Brazil has a huge market for a credit card. A credit card is a practical tool – if you use it wisely. However, it can inflict terrible damage if used inappropriately. Before deciding, there are several factors that you need to consider like your spending habits and the credit limit. It is crucial to shop around if you want to find the best one for your needs.

You should not rush. Here’s how to select the right credit card for you:

Checking the APR (Annual Percentage Rate)
APR is the first thing that you should understand and evaluate. APR is what the credit card company charges you to borrow money. The good news is that if you pay your balance in full every month by the due date, you can prevent incurring an interest. This means that APR will have no effect on the cost of the borrowed money.

In the event that you cannot pay in full every month, it is prudent that you know which cards offer the cheapest APR. You have to start with at least four different cards to compare. Choose the card offering the cheapest APR.

Knowing the minimum repayment
If you do not pay off the balance every month, you will be asked to at least repay the minimum amount. The minimum amount will depend on the credit card company but it is typically around 3% of the balance due. It is helpful to know this first in the event that you cannot pay in full.

Determining the annual fee
The annual fee is a common credit card fee. It is a fee that is directly charged once a year for benefits. There are credit card companies that offer lifetime waiving of annual fee while there are others that enforce it. It will be to your advantage if you choose a card with a low or waived annual fee.

Understanding the loyalty points or rewards
Credit card companies entice by offering loyalty points or rewards. The incentive programs will depend on the company. You have to check how and where the rewards can be utilised. You should also determine how you want to use them to make the most out of it.

Learning the cash back
Cashback will is a rebate of a percentage of the purchases you made on the card. It is important that you check out if you are likely to qualify for this program. It can benefit you at the end of the day.

What about the charges?
More importantly, you have to consider the charges. It is crucial that you check the credit card agreement because there you will see other charges that will apply to the card. Typically, you get charged for late payments, using the card abroad and going over the credit limit.

However you use your bank of brazil credit card, the key here is to determine whether you will be paying off straight or spreading your payments over a period of time. If you can pay the balance in full, you can benefit from the interest-free period. Even if you think you can pay the balance, it is worth planning what you will do in the event that you cannot.