Lady Perfection’s World

The first step in choosing a credit card is thinking about how you will use it.

• If you expect to always pay your monthly bill in full–and other features such as frequent flyer miles don’t interest you–your best choice may be a card that has no annual fee and offers a longer grace period.

• If you sometimes carry over a balance from month to month, you may be more interested in a card that carries a lower interest rate (stated as an annual percentage rate, or APR).

• If you expect to use your card to get cash advances, you’ll want to look for a card that carries a lower APR and lower fees on cash advances. Some cards charge a higher APR for cash advances than for purchases.

Most credit card companies offer several kinds of cards:

• Secured cards, which require a security deposit. The larger the security deposit, the higher the credit limit. Secured cards are usually offered to people who have limited credit records–people who are just starting out or who have had trouble with credit in the past.

• Regular cards, which do not require a security deposit and have just a few features. Most regular cards have higher credit limits than secured cards but lower credit limits than premium cards.

• Premium cards (gold, platinum, titanium), which offer higher credit limits and usually have extra features–for example, product warranties, travel insurance, no transfer fee or emergency services.