When I recently declared that my credit card drives me nuts, I must have hit a nerve. A number of Foolish readers emailed me to share their frustrations with mailing delays, slow payment postings, constantly changing rules, and other nuisances.
Unfortunately, some of this comes with the territory. Many card agreements let the credit card issuer adjust its policies at any time, for any reason, as long as it discloses the changes. That means you'll spend more time than you'd like reading micro-fine print on those inserts you get with your statement and the notes printed on your bill.
Still, you may be wondering whether there's a better deal to be had.
Your first tactic might be to try negotiating a change with your current card company. That worked for me. I complained about the shrinking grace period that had been driving me nuts, and I got a few days reinstated. If there's only one thing driving you bonkers, this can be much simpler than shopping for a new card.
If you're totally fed up with your credit card -- or maybe you're in the market for your first -- you'll want to start by making a realistic appraisal of how you'll use it. It's tempting to tell yourself that when the brand-new card arrives in the mail, you'll pay the balance off every month. If that hasn't been your pattern in the past, you might be better off using history as your guide and finding a card that will inflict less damage just in case you carry a balance for a month or two.
Then, you can start looking around. Most credit card shoppers gravitate first to the perks, like cash rebates or airline miles. This can be an effective way to winnow down the millions of plastic options available these days.
Don't stop there. In fact, once you've decided whether perks, and which ones, may be important to you, ignore that feature of the card while you examine all these other things:
Interest rate. It might take a multi-page spreadsheet, but you'll want to understand the interest-rate structure of the cards you're comparing. Is the advertised rate a teaser rate or an introductory rate? What will the rate be after the introductory rate expires? Is it a fixed rate or a variable rate? Do the advertised rates apply to balance transfers, new purchases, or both? Does the interest rate change depending on the outstanding balance? You can find the answers to this in the fine print of the terms and conditions. If not, call the card issuer and ask.
Your actual rate may depend on your credit score, which is something else that should be disclosed in the fine print. Make sure to look also at the rates for cash advances or other transactions, if you know you'll use the card for those purposes. Also compare the default rates, which may be charged if your credit score drops or if you make a late payment on this or any other card.
Billing method. How does the card issuer calculate your outstanding balance? It may be calculated over one or two billing cycles. It may use an average daily balance or the previous balance, and it may or may not include new purchases. If you occasionally carry a balance, you'll want to try to find a card that excludes new purchases. That can make a big difference in the finance charges you'll pay. See whether there's a minimum finance charge, too.
Grace period. This is the amount of time from the last billing cycle until you have to pay the balance before interest starts accruing. If you see the words "at least" in the disclosures, this could be an early indication that your initial grace period might not last. The billing method will tell you whether you'll get a grace period for new purchases if you carried a balance from the previous month.
Fees. These can be well worth your time to examine, even if you have scrupulous bill-paying habits. Every once in a while, an emergency, bank error, or some other unforeseeable glitch may cause you to pay a fee.
If the card charges an annual fee, you're probably best off looking elsewhere. Few perks are worth an annual charge. You may also encounter cash-advance fees or balance-transfer fees. They may be flat fees or a percentage of the amount. Then there are the typical late fees, returned-check fees, and over-limit fees, but these can vary widely among cards. Occasionally, you might even run into a credit limit increase fee or a set-up fee.
Lastly, inquire about fees for paying by telephone or for talking to a customer-service representative. You'll want to know about them before you call.
After you've done all that, go back and look at the cards' perks. You may see trade-offs you didn't recognize before. A card with a higher cash-back reward might charge more interest and higher fees. An airline-miles card may levy a hefty annual fee. You'll be in a better position to make a Foolish decision.
For more helpful information about how to make your credit cards work the hardest for you, take a look at the Fool's Credit Center. If you'd like to get more in-depth help with other aspects of your personal finances, give the Motley Fool Green Light personal-finance newsletter a look. It's on us at no risk with our free 30-day trial.
Fool contributor Mary Dalrymple is sure that something else will start driving her nuts now that her credit card grace period has been straightened out. She welcomes your feedback. The Motley Fool has a disclosure policy.