ONE OF the reasons that there are so many credit cards to choose from is that not every card is right for everyone. If you pay off your balance every month, you will want a different card than someone who carries a balance. Also, if you charge enough, you might be willing to pay an annual fee in order to receive rewards like airline miles in proportion to your purchases. It is recommended that you limit yourself to one or two credit cards. This makes it easier to keep track of your balances and to avoid mistakes like late payments and penalties.

Some factors that you might want to consider when choosing a credit card:

FEES

This is probably the most important consideration. Fees include the annual fee, the interest rate charged on balances, late payment penalties, and any other fees they charge. If you plan to pay your bill in full every month (as we strongly recommend), you will want to find a card with no annual fee. If you expect to carry a balance, you will want to choose a card with a very low interest rate, ideally one that guarantees that low rate for an extended period. Find out if there is a grace period before interest starts accruing, and if so, how long it is. Also find out how interest is calculated (for example, the average daily balance of the last cycle, or of the last two cycles, or something else entirely). Some issuers charge a fixed interest rate on balances, while others charge a rate that is tied to an index such as the prime-lending rate. Finally, find out whether there are any other charges, and under what circumstances they are assessed. For example, most credit card issuers charge a fee for cash advances, and some charge a fee when you close the account.

ACCEPTANCE

Some cards are accepted at more locations than others. The two that are the most popular especially in the United States (and which are also offered here) are Visa and Mastercard, and both are accepted at just about every merchant who accepts credit cards. If you are considering another type of card, be sure that it is accepted at the types of places where you will want to use it.

PERKS

A lot of credit cards come with benefits, such as rebates and frequent flier miles, for example National Commercial Bank (NCB) Lovebird Keycard, where you earn miles to travel on Air Jamaica, and Scotia Bank's AAdvantage Visa where you earn miles to travel on American Airlines. Try to estimate the dollar value of any such benefits when deciding which card to select.

CREDIT LIMIT

This is the maximum amount that you are allowed to charge on the card (until you pay some of it off). In general, the more they allow you to borrow, the better, as long as you plan to pay the full amount each month. Otherwise, it can be dangerous to have too high of a credit limit, because if you are not careful, you could dig a hole that is tough to get out of. There are several ways to search for credit card offers. The simplest is to open your mailbox, which probably supplies you with a steady stream of credit card offers from your local bank. Try to find two or three cards that meet your requirements, and then compare them. Read the fine print, to confirm that you understand all the terms of the agreement.

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