When it comes to credit cards and borrowing money you wouldn’t think that a low rate would ever be a bad thing, but depending on how you use your card you can actually lose money by choosing a card with the lowest interest rate. Here’s how:

For people who never carry a balance on their card from month to month, who, in other words, always pay their entire balance off each and every month, the interest rate on the card they use is meaningless. By paying off your balance every single month and never carrying any debt from one month to the next, it is perfectly possible to use a credit card as often as you wish and never pay a penny in interest payments.

If you never pay any interest then it doesn’t matter what the rate on your card is. It could be 1% or it could be 1000% — it wouldn’t make any difference.

The Grace Period

What would matter is the grace period on the card and any fees that the card has.

A card’s grace period is the amount of time that you can, in effect, borrow money for free. In other words, it is the amount of time that passes between the point at which you buy something (in other words, the point at which you borrow money to pay for a purchase) and the moment at which you must begin to pay interest on that purchase.

If you carry an outstanding balance on your card from month to month then there is no grace period; you begin paying interest on a purchase the day you buy something. However, if you pay off your debt each and every month, and you are not carrying any balance from month to month, then you may have up to 25 days after a purchase before you are charged any interest on the money you have borrowed, and so the grace period becomes much more important than the card’s interest rate.

Steer Clear of Fees If Possible

So for people who pay their entire debt each month, the interest rate on their card is meaningless. Fees, however, are another matter entirely. Regardless of whether you pay off your card every month or not, you do not want a card with a yearly fee. Most cards with revolving credit no longer have a yearly fee - but this is not universally true so be sure to check.

ATM fees are one of the biggest areas where banks sock it to customers. ATM fees can be outrageously high. Whether you make it a habit to pay your balance in full each month or not, if you use ATMs frequently you need to know which cards have the lowest ATM fees.

Some cards carry a monthly “maintenance fee.” This is a meaningless term that banks have made up in order to simply charge a monthly fee for having their card. In this way banks make money off of every single holder of their plastic every month, regardless of whether they pay their balance in full or not. Try to steer clear of any card with a monthly maintenance fee.

The Secret is to Shop Around & Compare Card Features

There are a lot of credit cards out there. Each of them has its own fees and its own rate. The only way for you to make an informed decision about which card is best for your lifestyle and your financial situation is for you to compare every card head-to-head, feature to feature, fee to fee. And the only way to do that is to find a website that allows you to compare hundreds of different cards all at the same time.

Remember, experts say that finding the right credit card as just as important as finding the right auto loan or even finding the right mortgage. So take a few minutes to compare before you commit - because it could save you thousands of dollars over the long run.

For The Largest Possible Selection of Credit Cards At The Best Rates This is My #1 Recommendation

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