by: Paula Marriss

Do a Google search for credit cards nowadays and you’ll find a truly baffling array of credit cards on offer with everything from 0% balance transfers, cash back rewards, and low interest payments on new purchases to Airline miles and free music CD’s. But in this minefield of offers, what’s the best card to choose?

It’s immediately obvious from the vast array of products on offer that everyone wants a piece of your business, but with financial products you need to look beyond the bright lights of the offer and decide which card best suits your needs. That is to say, what you will use the credit card for.

So how do you compare all the offers to decide which card to get? You don’t, well at least not yet anyway. The first thing you need to do is sit down and work out how you’re going to use the card. For instance, are you going to transfer an existing balance to the card, do you intend to pay the balance in full each month, do you want to make a lot of expensive purchases with the card, etc, etc.

Think about it honestly as this is what should really influence the deal you should eventually sign up for. So if you’re transferring a large balance from an existing card something like 0% interest on balance transfers for 6 months would probably be interesting (as you’ll save 6 months worth of interest payments) but it’s absolutely useless if you’ve got no balance to transfer.

Likewise high cash back incentives are only going to be any good to you if you intend to spend a lot of money with the card. Cash back rates are usually around 1% so you’re going to need to spend 100 to make 1. So in order to reap the financial rewards of a cash back incentive you’re going to need to both spend a lot of money with the card and pay off the balance in full each month to reap the true reward.

Other attractive incentives include 0% interest on new purchases for 6 months. Again with an offer like this, it’s only going to be of benefit to you if you intend to use it. So if you’re thinking of making a sizable purchase and would like what is in effect a 6 months interest free loan to pay it off, that’s the ideal offer for you.

Of course all the examples here are pretty cut and dried and your own financial situation will probably be a mix of several conflicting priorities in terms of your expenditure and ability to make payments. However don’t be lulled into thinking that there’s necessarily one solution to fit all. You could transfer a balance to one card to try and clear an existing debt while getting an interest free loan for a new purchase at the same time, just use two cards.

There’s quite a big health warning here though. You should only ever take on credit like this if you can control your spending on the cards with a will of iron. The worst case scenario would be to set off with good intentions only to end up with 2 balances to pay off both charging interest.

So what’s the sensible option? Think about what you need financially over the longer term, find the product that best suits this need and go for that.