Credit cards can be confusing, there’s no doubt about that.

You may be looking for your first credit card, or be looking for your first balance transfer credit card. Either way, there’s plenty of potential confusion to be experienced.

Because of this, we decided to bring you our top tips on things to look out for when you want to compare credit cards:

1. Annual percentage rate (APR) – the lower the better
2. 0% balance transfers for ‘x’ number of months – the longer the better
3. Balance transfer fee – the lower the better
4. 0% purchases for ‘x’ number of months – the longer the better
5. Rewards – the bigger the better (depending on circumstances)

Note: Be sure to pick a credit card best on the features that best suit your individual needs.

1. Annual percentage rate (APR) – the lower the better

• This stands for how much you will pay for any amount you borrow on your credit card
• To pay a provider for the credit facility you pay interest
• The APR is the percentage of interest you will pay on any amount you borrow
• It is the figure given so that consumers can easily compare the cost of different credit cards
• Generally speaking the lower the APR, the better the deal is for the consumer
• A ‘typical APR’ is the best amount you are likely to be charged for a particular card
• The APR you are charged will be calculated based on your credit history
• If you present more risk to the lender because of a tainted credit history, you will be charged more for the privilege of borrowing money
• Compare our top deal credit cards here

2. 0% balance transfers for ‘x’ number of months – the longer the better

• If you wish to transfer your credit card balance to another card, and benefit from an introductory offer of 0% APR, you will be offered a ‘0% balance transfer period’
• The longer the 0% balance transfer period, the better the deal
• The interest-free period will be quoted in terms of the number of months you will be benefit from 0% APR from when you open the card
• The 0% APR offers range from 9 months to 15 months
• Beware of sister companies because some cards are operated by the same parent company. Usually, you will only be allowed one introductory offer per parent company
• Compare balance transfer credit cards here

3. Balance transfer fee – the lower the better

• Credit card companies will charge you a ‘Balance transfer fee’ to move your existing balance over to their card. This usually ranges from 2.5% to 3.5% of the balance you wish to transfer
• The lower the balance transfer fee, the better the deal
• Compare balance transfer credit cards here

4. 0% purchases for ‘x’ number of months – the longer the better

• If you are looking for a credit card, but don’t want to transfer a balance from an existing card, the most important thing to look at (after the APR) is the number of months at 0% for purchases
• As an incentive, credit card companies offer introductory offers of 0% interest on any purchases you make over the interest-free period
• These 0% purchase periods offered usually range between 3 months to 6 months
• Generally speaking, the longer the 0% offer the better the deal is
• Look out for companies offering 0% until a set month in a set year e.g. 0% on purchases until July 2008 – make sure you work out how many months you will actually be getting from when you take up the offer
• If you’re getting a card for a balance transfer, you needn’t look at the 0% purchases offers. If you transfer a balance to a credit card you should ideally avoid making purchases on it because any money you pay off will go towards clearing the cheapest debt first (the balance transfer amount charged at 0%)
• Compare 0% purchase credit cards here

5. Rewards – the bigger the better (depending on circumstances)

• Some credit cards come with rewards ranging from store discounts to air miles
• Be sure that the reward the card is offering is something that you will benefit from
• If you are looking for a good balance transfer card, the rewards offered should really be the last thing you look at. The most important features of the card will be the 0% balance transfer period and the transfer fee
• If you are looking for your first credit card and expect to pay off your balance in full each month, the rewards will probably be the most important feature to look at when comparing credit cards
• If you want to contribute to charity, you may be better off getting a cashback card and giving any cashback you earn to the charity directly – some charity credit cards pay a lower reward percentage than the cashback cards
• Compare cash back & reward credit cards here