Cash-back credit cards are often found with strings attached. Today, they said you’d be getting 5% of your spending, but the next month, you’ll be getting just 3%. You can end up in this pitfall if you don’t check out the details of the cards which are written in the fine print of your credit card. Credit card companies reserve the right to change their terms without prior notice. This is why you cannot really complain about the changes. What you really need to is to prepare.

Credit cards have variety of kinds but they all share ideal criteria: low interest rate, high credit limits and reasonable due dates. Credit card comparison websites produce rankings, often putting those with the lowest interest or APRs (annual percentage rates) on the leader board. But if you look closer, putting other elements together with the rates, you would see that the real comparison should come from you. For instance, credit card A has a lower APR than Credit Card B. Credit Card B, even with its lower APR, promises a great cash-back reward rate which is higher than Credit Card A’s. If you have a credit of $1,000 in both cards, how much finance charge should you pay for each, and how much do you expect to receive from each? Whichever provides you an overall benefit better is the leader.

Not all of us rewarded with mathematical brains, and we may think that interests and credit figures are hard to calculate. But we all know our simple formula: interest is equals to principal times the interest rate. We can even pull out our friend, the calculator. The rates may be tricky but with careful analysis, you’ll get used to it. It would also be better to get a spreadsheet application open and input the details in the cells. For instance, in one column, the cash-back rewards rate, and so on. Spreadsheets are also functional as calculators. Putting details of several credit cards through rows and columns will help you compare and obtain the potential returns per card. It is also easy since they work automatically, too. For simplicity, you can just use a sheet of paper, a pencil and a calculator. Make sure you have a reliable estimate of how much you are going to spend, the rates appropriate for that amount and the basic knowledge of computing interests. Don’t worry the formula uses the basic mathematical operations.

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