HSBC: Choosing The Right Credit Card

August 10, 2015

[Advice column by HSBC Bermuda] I’d like to get another credit card, but there are so many different options available in Bermuda. How do I select the right card for me?

This is an excellent question. Credit cards can be one of the most useful tools in your wallet. In addition to its primary purpose credit cards can provide travel insurance, rewards, cashback, and several other benefits, depending on the card. It is important that you take the time to really compare your credit card options so you can make an educated decision on what is best for your lifestyle. Here are some things to consider:

1. Give some thought to how you’d like to use your credit card

  • Do you plan to use the card for purchases in Bermuda or overseas? Once you decide you can narrow down your card options by currency.
  • If you’re going to pay your balance in full every month, then the interest rate or APR [Annual Percentage Rate] shouldn’t be a big factor for you. If you anticipate having an outstanding balance carried forward every month then be sure to compare interest rates of each card. The lower the interest rate, the better.
  • If you plan to use the card on a frequent basis you should consider all components of the credit card. Look for a card with an appropriate credit limit (the maximum amount you can afford to spend), attractive interest rate and fees, and a rewards programme that fits your needs.
    • Credit Limit: Based on your current financial standing, the credit card provider will determine an appropriate amount
    • Fees: All cards incorporate some type of fees. This may include annual, transaction or penalty fees. Be sure to compare the fees for each card.
    • Rewards Programme: Look for a programme that offers rewards that you will use such as cashback, travel, gift certificates, etc. Determine if one card offers more rewards for each dollar spent, are there blackout dates for redeeming and will your rewards expire if not used by a certain date.

2. Do you need an additional credit card?

If you are currently struggling to manage payments for your existing credit cards please reconsider getting another one. Your overall financial health is important and by getting another card you are increasing your chance of getting deeper in debt. If you need assistance managing your finances please book a Free Financial Planning* appointment and we help you get back on track.

Free Financial Planning with HSBC

HSBC can help you manage your money and develop a financial plan! Our approach takes you through the complete financial planning process, at no cost to you. We’ll work with you to understand your particular circumstances and your financial ambitions. From there, we provide you with solutions on how to manage, grow and protect your savings to achieve your goals.

To make a free Financial Planning appointment visit www.hsbc.bm/planning or by calling 299-5959.

Issued by HSBC Bank Bermuda Limited which is licensed to conduct Banking and Investment Business by the Bermuda Monetary Authority.

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