Choosing a credit card for yourself or your business

Choosing the right credit card can be a real challenge – but it doesn't have to be. Here's a look at what you should keep in mind before you make your pick.

• Start with the basics: rates and fees.If you're not going to pay off the balance in full every month, the annual percentage rate (APR) is probably the most important consideration. Rates can differ considerably – from as low as 10% up to 25% or more for applicants with bad credit – and this can have a huge impact on how much the card costs you. On the other hand, if you plan to rarely use the card, or if you will pay it off in full every month, the APR isn't as important as the annual fee.
• Don't be distracted by introductory offers. Tempting introductory rates are extremely common in credit card marketing: "1.99% APR for six months!" "No fees for the first year!" These offers can be helpful at first – but make sure you evaluate the card based on the real, permanent terms, which can be far, far worse than the introductory offer.
• What are you getting back? The competitive credit card market has led many banks and lenders to provide creative rewards programs. From airline miles to points to straight-up cash back, there are tons to choose from. Comparing one to the next can be complicated, so it's worth spending a little time on it. Write up a list of what you might spend on the card in the course of a year in some basic categories: food, gas, groceries, etc. Once you have that, you can calculate what you'd get from each reward program.
• Tough credit? Try prepaid. While they lack some of the convenience of traditional credit cards –namely, that you can spend first, then pay –prepaid cards are a good way to build up your credit history if you've got a problematic credit history.
• Too many applications can hurt you. Don't just fill out every application you can and hope that one sneaks through. Repeated credit inquiries show up on your credit score and can hurt your chances of getting a card.

Want to learn more? The Federal Reserve has a great credit card site that provides loads of details and tools for figuring out exactly what you should be looking for and expecting.