How to ensure you get the best credit card deal

WITH banks, supermarkets and department stores offering credit cards, finding the best deal can become an overwhelming test.

Luckily we are now able to compare credit cards online, enabling us to see the simplified facts and figures of every card at the click of a mouse.

According to figures released buy the Bank of England the total amount borrowed by UK consumers on credit cards in March 2010 had reached £59,756,000,000. With so much money tied up in unsecured flexible loans, how can you be sure you are getting the best credit card deal?

Not every credit card is right for every person. Personal finance is just that, personal, and taking the time to compare credit cards online can ensure you find the product to fit you. Choosing a card isn't just about the credit limit and APR, there are a multitude of other factors to consider before you start filling in any applications.

Depending on how you spend, various deals could be vital to your decision. Applying for a credit card for emergencies (for peace of mind when you hit a little money-problem patch), with the plan to pay off any expenditure within the month is a workable way to take advantage of this type of credit.

Look for an agreement with a reasonable grace period, allowing you to make payments in time without incurring any interest. Many companies now offer this type of payment system, encouraging customers to spend sensibly.

Should you be using your card to make retail purchases or large payments which are likely to carry over from month to month, it is essential to find a credit card with a low APR.

APR, or annual percentage rate, is a term for the rate of interest you will pay on your balance due for a full calendar year. The lower the APR, the less interest you will pay, meaning smaller charges will be applied to your bills each month.

Some people find credit cards useful for large purchases, such as holidays or key pieces of furniture. Finding a card that offers an interest-free period enables you to spread the cost of your investment over a set period of time. A common interest-free period is six months, however it is not unusual for companies to offer slightly less or substantially more than this; compare credit cards online to guarantee you have found the best arrangement for your needs.

The majority of companies do charge if you withdraw cash from your credit card at a cash machine. Cash advances can be expensive and so, if tangible funds are what you are after, a credit card may not be the right means of borrowing for you. It is recommended not to take cash advances on a credit card, check the companies' rates when you compare credit cards online to find the lowest available, just in case.

An annual fee is an additional, yearly charge payable by the cardholder. Many cards are now available without this extra cost, however cards with benefits such as fixed low interest rates are likely to charge this in addition to said interest.

As well as APR, charges and the financial considerations, credit cards now come with a wealth of benefits for their owners. From loyalty points to holiday discounts, and air miles to free grocery discounts, there are cards offering an array of goodies.

It is important not to be enticed in by the 'freebies' – remember, in most cases you have to spend the credit to get the rewards, which can lure you into debt quite quickly. In some cases these benefits are worthwhile, but only when considered as part of a full credit agreement and not on their own.