When looking for a credit card, it can be confusing if you don’t know exactly what you’re looking for. With literally thousands of credit card options out there, not only can the choice be overwhelming but weeding through the terms and conditions of various credit card offers can be daunting.

Credit card companies are very business savvy, and can sometimes take advantage of financial ignorance and inexperience. So many people who don’t know better will sign up for the first offer in the mail or for a credit card that just isn’t right for their spending behavior or their financial needs.

What should YOU do?

First you need to know what your financial needs and goals are and write them down on paper. When you sift through various offers, you will be able to hold them up to your list. An example is if you typically reserve your credit card for major purchases that you prefer to pay off over a longer period of time. In this case, you would be better off selecting a credit card with a low Annual Percentage Rate (APR) which refers to the amount of interest accumulated over a period of a year. (Note that APR rates depend on the number of compounding periods. An 8% interest rate compounded monthly is a bit lower than an APR of 8% compounded daily.)

If this is your first credit card, you may not be able to get a low APR credit card until you establish some credit history, or you may need to pay an annual fee for the privilege. You may not know that you can negotiate your higher interest rate credit cards down to a lower APR by calling your bank or credit card issuer, but you will likely be charged that annual fee.

If you plan on using credit cards for daily expenses like movies, groceries, gas and clothing, and if you expect you will be able to pay off your balance at the end of each month (thus paying no interest on your credit card), you will want to avoid credit cards with annual fees, as you won’t be paying interest anyway. Essentially a 35% credit card and a 10% credit card are equal if your interest payments are zero. For daily purchases, you might want to have a rewards credit card that accumulates points or offers other incentives to reward you for your high volume spending.

If you plan to use your card for cash advances – don’t. Usually the interest rates are very high and the grace period is non-existent, meaning you pay interest from the day you withdraw your cash.

If you have varied spending habits…

If your spending behavior varies, you will also want to consider a few other factors, including where is the credit card accepted (both merchants and internationally), whether the interest rate is fixed or variable, the APR, rewards and rebates, restrictions, extra fees, penalties and grace periods. You’ll also need to decide whether you need a personal credit card or a business credit card. Credit card search engines like Creditorweb.com help you compare credit cards and the various credit card offers’ details so you can make a sound decision.