Here’s how to choose a new credit card

The Reporter (Lansdale, PA) - - BUSINESS - To learn more, visit Con­sumerRe­ports.org.

If you’re con­sid­er­ing get­ting a new credit card, you’ve prob­a­bly got a good rea­son. You may be think­ing you’d like to earn miles to­ward air travel or a ho­tel stay. Or, if you drive a lot, you may want to re­duce your gas ex­penses by us­ing a cash-back card.

But if you de­cide to go ahead and ap­ply for a new card, think also about how much it may cost you, ad­vises Con­sumer Re­ports. Con­sider whether you’ll be pay­ing off your credit card bal­ance each month, and what the in­ter­est rates are on out­stand­ing bal­ances.

Here’s what Con­sumer Re­ports sug­gests you con­sider:

• Up-front bonuses. Some cards of­fer cash bonuses for sign­ing up and spend­ing a cer­tain amount – usu­ally from $500 to $3,000 – within the first three months. A bonus may in­clude 40,000 miles just for sign­ing on or an extra $500 in cash back in the first year.

• Teaser rates. Many cards of­fer you ini­tial, low in­ter­est rates, which can be at­trac­tive to peo­ple who carry a bal­ance. Some even carry zero-per­cent in­tro­duc­tory of­fers. If you are tempted to ap­ply for a card that of­fers such a teaser rate, read the fine print so that you know how much the rate could rise when the in­tro­duc­tory pe­riod is over. Oth­er­wise, with­out re­al­iz­ing it, you could end up pay­ing a high in­ter­est rate on any out-

stand­ing bal­ance that you have. If you are con­sid­er­ing such a card be­cause you are al­ready pay­ing in­ter­est on a dif­fer­ent card, find out what the bal­ance trans­fer fees are be­fore trans­fer­ring the bal­ance to a new card.

• Free air­fare. Fre­quent fliers might be en­ticed by “free round-trip ticket” pro­mo­tions by air­line and bank cards. Bank cards usu­ally let you re­deem points with any air­line, so you gen­er­ally can get an un­re­stricted flight with­out being sub­ject to black­out dates and lim­its on the num­ber of re­ward seats. With cards is­sued by air­lines, you might need to use up to 50,000 points to get an un­re­stricted flight on the dates you want to travel.

• Waived an­nual fees. Many credit card is­suers waive the an­nual fee in the first year. But in the fol­low­ing year, the fee could kick in. So con­sider it care­fully. An an­nual fee may be charged when the card of­fers re­wards, such as fre­quent flier miles, ho­tel points or even cash back. Is it worth pay­ing? It de­pends how much you travel. If you are a fre­quent flier and the air­line you fly charges you a fee to check lug­gage, you may be better off pay­ing the an­nual fee and get­ting that perk for free.

• Se­cured cards. If you have a low credit score, a se­cured card, which re­quires a se­cu­rity de­posit, may be ap­peal­ing to help you im­prove your credit. This may be your only op­tion. But some cards are far better than oth­ers, and you need to be on alert for oner­ous fees.

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