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How should I choose a credit card?

Choosing a credit card can seem like a complicated business. After all, numerous lenders can be found advertising on television, in newspapers and even in magazines. The key thing to remember is that you shouldn't be tempted by the most glossy ad or the funniest television advertising campaign.

It's important that you sit down and spend some time comparing credit cards, to find the one that meets your need. Here are some important factors that you should take into account:

Interest Rate: Something that you may think is quite obvious but you need to spend time considering this. Look at the APR advertised by different companies and see which is lower. Also consider whether the rates quoted include "hidden" costs. For example, do they offer an introductory rate that will only be available for a limited period?

Annual Fee: Do you have to pay an annual fee to make use of the credit card on offer? If so, you might want to look at other alternatives, as there are plenty of cards on the market without an annual fee.

Free Insurance: Many companies will offer free insurance on items purchased using their card, above a certain value. See if this insurance is available and what the minimum purchase value is.

Loyalty Rewards: It's probably not worth getting too carried away by the mention of loyalty rewards. Many cards require you to spend a great deal of money in return for a relatively minor benefit.