Credit card companies not loved?

Who’d have thought it? Many consumers don’t particularly like their credit card companies. Newsweek reported Thursday that 78 percent of of people participating in J.D. Power and Associates’ annual customer satisfaction survey said they were considering switching.

The magazine said that now: “It seems like everyone loves to hate their credit card companies…” Some might wonder what took them so long.

Credit card offers–how to pick one

On the same day that the Newsweek story appeared, The San Francisco Chronicle carried a feature under the headline, “4 Tips for Picking the Best Credit Cards.” As the title suggests, it identified four key criteria for judging credit card offers:

• Credit card rates

• Annual fee

• Credit card rewards programs

• Convenience

The Chronicle’s analysis was excellent as far as it went, but may be a little basic for readers of index credit cards. So let’s beef it up a bit.

Credit card rates

Yes, as the Chronicle says, it’s important to carefully analyze the credit card rates on offer. You need to know whether it’s an introductory rate, and, if so, how long it will last and what the standard rate will be when it expires. You need to be aware that many companies advertise ranges of rates, and you shouldn’t suppose that you’ll be granted the lowest. And you need to be clear about whether the headline annual percentage rate (APR) applies only to purchases, and what rates will be applied to cash advances and balance transfers.

But you also need to be clear that–depending on your circumstances–you may be better off ignoring credit card rates. If you’re the sort of person who invariably pays off their balance in full each month, then it doesn’t matter if the APR is 100 percent because you would never have to pay it.

If credit card rates are important to you, you should check out the Iberiabank Visa Classic card. At the time of writing, this has a variable purchase APR that starts at 7.25 percent, which is unusually low. However, bear in mind that you only get this rate if your credit score is exceptional, and that it is a variable rate. Otherwise, currently, if you are approved you may be eligible for 7.25 percent, 10.25 percent or 13.25 percent APR for purchases based on your creditworthiness. The APR will vary with the market based on the Prime Rate.

Annual fees

These can add up, particularly if you have a number of cards. But there are still plenty out there that have no annual fee.

Credit card rewards programs

Credit card rewards programs can be a minefield, and a comprehensive guide would need more space than is available here. However, here are some key guidelines:

• Make sure the issuer can’t unilaterally devalue your hard-earned points

• Avoid programs that allow points to expire unless you’re sure you can use them during their valid period

• Airline miles often only suit people with a particular lifestyle; don’t sign up for them unless you’re sure they’re good value for you

• Steer clear of programs that have high earning thresholds unless you’re sure you can meet them without incurring expense

Convenience

This isn’t much of an issue for most credit card companies, but the Chronicle suggests that you make sure yours has a good ATM network, electronic payment facilities, and round-the-clock customer service.

Other factors including balance transfer credit cards

If you’re exploring balance transfer credit cards, then you really ought to consider the Citi Simplicity® Card. That breather from paying interest could allow you to make serious inroads into your credit card balances.

One final piece of advice–card issuers are notorious for “gotcha” clauses that are buried in the small print of credit card application forms. So take the time to understand fully what you’re signing up for. Mistakes at this point can prove expensive later.

Published 09/03/10 (Modified 04/07/14)