Credit cards can be a very convenient means of paying for anything from your shopping to your bills to your online air plane ticket bookings. But are you aware that there are so many factors you have to take into consideration when choosing a credit card? By being aware of all of these factors, you could save a large sum of money on your credit card usage. We will show you through our “Compare To Save” series, how you can compare credit cards to save money and what you need to know to pick the right product.

Save by comparing: foreign exchange fees

Travelling abroad? If so, take a step back and find out about the foreign exchange fees (FX fees) that you may have to pay when using your credit card overseas. You could be charged between 1% and 3% of your transaction amount.  For instance, if your credit card has a foreign exchange fee of three percent, and you use it abroad to buy an item worth $500, you will get charged an additional $15 for your purchase. Therefore, the total amount you would pay to buy the item is $515.

So how are foreign exchange fees calculated? In a nutshell, these fees are calculated as a combination of a fee that your network (i.e Mastercard, Visa) and your credit card provider or bank charge for processing transactions with international merchants. Keep in mind, foreign exchange fees vary for different service providers.

If you are someone who travels frequently, you may want to look at foreign exchange fees when choosing the best credit card for your needs.

[Compare credit cards in the UAE]

[Related: Using your credit card abroad | The lowdown on airmiles linked credit cards]

Easy payment plans: lowering the cost of your purchase on credit cards

Have you ever been tempted to buy something you really liked but did not have the necessary cash? Or perhaps you are thinking of upgrading your white goods and cannot afford to pay for them in cash in one go? This is where credit cards with Easy Payment Plans (EPP) can be a good option for you. Simply put, if you make your purchases using a credit card with an easy payment plan, you can then pay back the borrowed amount in zero interest instalments. The repayment period usually varies between 3 months and 12 months depending on the bank. So for example, if you made a purchase of 20,000 dirhams on your credit card using an easy payment plan of 12 months, you can pay back 1,666 dirhams a month for 12 months. But, if you made the same purchase using your credit card without a payment plan, you could end up paying between 300 and 800 dirhams in interest on top of the 20,000 dirhams principal amount. And that is assuming you pay the entire amount off the following month. If you were to pay it off over several months, the amount you owe could really add up.

Although credit cards with easy payment plans can offer you excellent flexibility and zero interest instalments, bear in mind that if you decide to pay the amount off early, you may be charged an early settlement fee by the issuing bank. Additionally, not all shops have tie ups with credit cards offering EPP options, so before applying for a card with an EPP, make sure that it has a range of offers to make it worth your while. Remember to make sure you are able to pay your instalments back regularly and on time before you take a credit card with an EPP option.

[Related: Easy payment plan on your credit card | The curse of compound interest on your UAE debts]

Save by comparing: credit card annual fees

When looking for a credit card, you may find yourself leaning towards the ones that give you discounts, special and exclusive offers, dining offers, loyalty programs, golf benefits and the list goes on. But did you know that some of these cards also have higher annual fees attached to them? It is important to decide if you are after a card that offers you lifestyle benefits or if you’re more interested in a card that you can use when you really need that extra money. If you prefer a basic credit card with lower fees, you could consider a free-for-life card. As its name suggests, a free-for-life credit card does not charge you an annual fee. But remember that several banks require a higher minimum salary before they issue a free-for-life card. Some banks offer free-for-life cards with selected benefits as well. Whatever your purpose of getting a credit card is, compare annual fees to make sure you know which cards offer you good value in return for the fees you will have to pay.

[Related: Free-for-life credit cards: What does that mean? | Credit cards that allow you to travel in style]

Editor’s tip:  Remember that when taking out a credit card, you should compare other factors such as interest rates, other charges and even offers.