After the U.S. Census Bureau, more than 181 million American citizens are credit cardholders.

Seventy eight percent of consumers own a credit card, and the average owner has 3.5 cards. This means, that nearly everybody ought to make its own decision on choosing the best credit card offer.

Just browse online or through the daily newspaper, move around the town and you will see competing offers everywhere. In this situation, what are the most important factors to consider while deciding?

Practically, there is not anything like a best credit card offer. The superior question is “Which offer is more suitable for me?” The expenditure habits and living styles of cardholders vary and their needs differ too. Before deciding which proposal is best, you must assess your requirements, income, lifestyle and expenditure habits.

Card interest rates

According to cardholders, interest rates and annual fees are among the most crucial factors in the choice of a credit card but not the only one. Consequently, a proper understanding of these rates is even more compulsory. Card interest rate is the rate, which the card issuers charge on the due amount. The card issuer charges you such an interest only if you do not fulfill your obligations on time. When you receive your credit card statement, it clarifies the full amount you owe the credit card supplier; it specifies the minimum payment that you must make (by a particular date), in order to avoid incurring fees. You have the choice of making either a full payment or just the minimum payment. If you decide to make a full payment by the due date, you are not charged any interest. Nevertheless, if you make a partial payment, the credit card supplier will calculate due interest based on the annual interest rate on the balance amount. The credit card companies calculate the monthly interest rate on the balance amount that you owe them. This is the full amount minus all payments made by you. This way, the interest rate is part of your balance for the following month (next billing cycle). If you make a partial payment once more, a new balance is re-calculated again; it keeps going on and on until you fully repay your obligation. According to recent data from Federal Reserve’s G.19 report on consumer credit, the average APR on credit card with a balance in 2011 was 12.78 percent. That is how credit rate acts in this vicious circle. Here is the cause why the most key variables in choosing a credit card is the interets rate.

The reward points

According to research from Federal Reserve Bank of Boston, more than 60 percent of consumers own a rewards credit card. Visa claims rewards cards now make up more than half of all cards issued and about eighty percent of credit card expenditures. Most cardholders state that rewards are the second-most important reason for deciding to apply for a specific card, behind no annual fees and ahead of rates. (Source: Group survey, January 2008)

If you fly by air frequently or have a preferred retail store where you often shop, you may choose one co-branded card; these cards offer rebates, discounts, and other kind of rewards when used for making payments at them.

Similarly, we may also have branded cards for gas stations and grocery stores where you often make purchases. If you do not have any specific needs, you can use a general purpose card, which accumulates reward points on every purchase. These points can later be redeemed for cash, rebates, or rewards. By so doing, such card could become a good deal for you.

Credit card fees

You must read your card agreement carefully just to make sure you understand all the fees you agree to pay. The most common fees to look for are: an application fee (charged when you apply for a card), an annual fee, a membership fee, a participation fee (a charge for having the card), a set-up fee (charged when you when you open a new account), a cash advance fee (charged when you use your credit card to get cash), a late-payment fee (charged if you pay after the due date), an over-the-limit fee (charged when your balance goes over your credit limit), a credit-limit-increase fee (charged when you ask for an increase in your credit limit), an insurance and a debt coverage fees. You should analyse your agreement thoroughly to make sure you understand the services offered and the fees.

To summarize: if you make a detailed research, you will find lots of lucrative proposals. However, this does not mean that all of them are suitable for you. In order to take a reasonable decision, you must evaluate your needs and rank them precisely. Further, you can make your choice and apply for a credit card, which covers most of your requirements and provides benefits.