Consumer Financial

Protection Bureau

How to find the best 

credit card
1. Decide how 

you plan to use 

the card

You may plan to pay off your 

balance every month to avoid 

interest charges. But the reality 

is the majority of credit card 

holders don’t. 

If you already have a credit card, 

let history be your guide. If you 

have carried balances in the past, 

or think you are likely to do so, 

consider credit cards that have 

the lowest APRs. These cards 

typically do not offer rewards 

and do not charge an annual fee.

If you have consistently paid off 

your balance every month, then 

you may want to focus more 

on fees and rewards. Always 

compare the value of rewards 

you expect to receive (and use) 

each year with the annual fee you 

might pay. 

Why should you shop around?

Comparing offers before applying for a credit card 

will help you find the right card for your needs, and 

ensure that you’re not paying higher fees or interest 

rates than you have to. 

Not shopping around could be more expensive 

than you think. Consider two credit cards: One 

carries an 18 percent interest rate, the other 15 

percent. If you owed $3,000 on each and could only 

afford to pay $100 per month, it would cost more 

and take longer to pay off the higher-rate card:

To pay off a $3,000 credit card balance with 

$100 per month at

APR Interest Months

18% = $1,015 41

15% = $783 38

The higher rate card would cost you an extra 

$232. If you pay only the minimum payment 

every month, it would cost you even more.

When your rates can rise

Credit card companies cannot raise your rate for the 

first 12 months after you open your account, unless:

§ You have a variable rate card tied to an index and 

the index rises 

§ There is an introductory rate (introductory rates 

must last at least six months) 

§ You are 60 days late paying your bill 

§ Your rates can go up at any time after the first 

year, but the creditor must notify you about the 

change in advance
2. Know what 

to compare

APR Sometimes the offer will 

list several rates or a range of 

rates, and you won’t know the 

rate you’ll get until after you’re 

approved. Would you still want 

the card if you had to pay the 

higher advertised rates? 

APR for balance transfers If you 

will be transferring your balance 

from one card to another, 

compare the interest rate you are 

paying now with the rate you’ll 

pay over the life of the new card – 

not just the introductory rate.

Penalty APR Check for a penalty 

APR. The offer must tell you what 

the penalty rate is, what triggers 

it, and how long it would last. 

Fees Compare the fees listed for 

each card. Common fees include 

a cash advance fee, a latepayment fee, and for some cards, 

an annual fee.

3. Shop around and 

ask for better deals

Start your search for a new card 

at your bank or credit union. Your 

existing relationship may qualify 

you for a better offer.

If you have a credit card and 

are happy with your service but 

think you’re paying too much 

in interest and fees, then see if 

the issuer will match or beat the 

terms and rate on the new card 

you’re considering.

Next, compare the offers with 

others you’ve received at home 

or have seen online.

Only apply for the credit you 

need. If you apply for too many 

cards over a short period, it 

could affect your credit score.

4. Transfer your 

account with care 

Most credit cards charge a fee 

to transfer your balance. So even 

though a 0 percent interest rate 

on balance transfers may sound 

appealing, it isn’t free. A one-time 

fee of 3 percent of the balance 

you’re transferring is common.

When you move your account, 

don’t close your old account 

right away. Continue to make 

at least the minimum payment 

while you’re waiting for the 

balance to transfer to the 

new card.

If you transfer your balance to 

a new card, and you feel you’ve 

made a mistake after reviewing 

your disclosures, you can 

generally change your mind if you 

act within 10 days after the credit 

card issuer sends you account 

opening disclosures. Contact 

the credit card issuer as soon as 

possible if you think you’ve made 

a mistake.
Credit card terms to know

APR For credit cards, the APR is the cost of credit 

expressed as a yearly interest rate. 

Annual fee A yearly fee that may be charged for 

having a credit card. Some card issuers assess the 

fee in monthly installments. Some cards do not 

have an annual fee. 

Balance The amount owed on the account, 

including the charges, interest, and fees owed. 

Balance transfer fee A fee charged when you 

make a balance transfer. It may be a flat fee or a 

percentage of the transfer. Some cards will charge 

0 percent interest on balance transfers, but that 

doesn’t mean the transfer is free.

Credit limit The maximum amount that may be 

borrowed on a credit card. Some credit card 

advertisements offer a credit limit “up to” a certain 

amount – but you may not qualify for the maximum. 

Maxing out a card with a low credit limit can hurt 

your credit score, which could make it more difficult 

and more expensive to borrow in the future. 

“Go-to” rate Interest rate you are charged after the 

introductory rate.

Grace period The number of days you have to pay 

your bill in full before an interest charge is assessed 

on purchases. 

Introductory or promotional APR Your card 

may have a lower APR during an introductory or 

promotional period and a higher rate after that 

period ends. Under Federal law, the introductory 

period must last at least six months, and the credit 

card company must tell you what your rate will be 

after the introductory period expires.

Penalty APR The APR charged on new transactions 

if you trigger the penalty terms in your credit card 

contract. Your credit card issuer may consider you 

in default if you pay late, go over your credit limit, 

or if your check is returned. Penalty rates usually 

are higher than your standard or introductory rates. 

If you become more than 60 days late, the penalty 

APR may be applied to your existing balance.

Penalty fees Fees charged if you violate the 

terms of your cardholder agreement or other 

requirements related to your account. For example, 

your credit card company may charge a penalty fee 

if you make a late payment or if you exceed your 

credit limit.

About the CFPB

The CFPB is a 21st century agency that 

helps consumer finance markets work by 

making rules more effective, by consistently 

and fairly enforcing those rules, and by 

empowering consumers to take more 

control over their economic lives.

Learn more at consumerfinance.gov

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