How to compare credit cards: APR, rewards, fees and what matters most

Comparing credit cards can feel overwhelming. One card may promote cash back, another may offer travel rewards, and another may highlight an introductory APR or no annual fee.

The best credit card is not always the one with the biggest rewards offer. It’s the card that fits how you plan to use it over time.

When comparing credit cards, focus on three main factors: APR, rewards and fees. APR affects the cost of carrying a balance, rewards affect the value you may earn from spending, and fees affect the total cost of owning and using the card.

This guide breaks down how each factor works, how they compare and how to decide which features matter most based on your financial habits.

APR, or Annual Percentage Rate, is the cost of borrowing money on a credit card when you carry a balance from month to month.

If you pay your statement balance in full by the due date, you may avoid paying interest on purchases. But if you carry a balance, interest can be added to what you owe. That means a purchase may cost more over time than the original price.

Some credit cards may offer an introductory APR for a limited time. After that introductory period ends, the regular APR applies. Cards may also have different APRs for different transaction types, such as purchases, balance transfers or cash advances.

APR matters because interest can build over time. Even a small balance can become more expensive if it is not paid down, especially on a card with a higher APR.

APR should be a top consideration if you expect to carry a balance.

A card with strong rewards may look appealing, but rewards can lose value if interest charges add up. For someone focused on managing borrowing costs, a lower-APR card may provide more long-term value than a card with higher rewards.

In Short: 

• APR determines how much interest you may pay
• APR usually matters most when you carry a balance
• Lower APRs can help reduce long-term borrowing costs
• Introductory APRs may change after the promotional period ends

APR is about cost control. If you may need time to pay off purchases, it is worth looking closely at the APR before focusing on rewards or perks.

Credit card rewards are benefits earned based on eligible spending, usually in the form of cash back, points or travel rewards.

Rewards can vary widely from card to card. Some cards keep things simple with the same rewards rate on most purchases. Others offer higher rewards in specific categories, such as gas, groceries, dining, travel or purchases with certain brands.

Rewards are most useful when they match how you already spend. A travel rewards card may not provide much value if you rarely travel. A grocery or gas rewards card may be more useful if those are regular expenses in your budget.

Some people use different cards for different types of spending to maximize rewards. For example, one card may offer stronger rewards for groceries while another may offer travel benefits. That approach can work well for people who are comfortable managing multiple cards, payment due dates and balances.

Others may prefer one primary card with straightforward rewards. That can be easier to manage, especially if simplicity and budgeting are the priority.

Rewards tend to matter most if you pay your balance in full consistently. That way, you may be able to benefit from rewards without reducing their value through interest charges.

In short:

• Rewards provide value based on how you spend
• Different cards reward different behaviors
• The best rewards card matches your spending patterns
• Simpler rewards may be easier to manage
• Multiple cards may offer more customization, but require more tracking

Rewards are about value. The right rewards structure depends on your habits, not just the highest advertised rate.

While APR and rewards often get the most attention, fees can also affect the total cost of a credit card.

Some fees are tied to owning the card. Others depend on how you use it. Understanding fees upfront can help you compare the real cost of different credit card options.

Annual fees can be worth it in some cases, especially if the rewards or benefits you use are greater than the cost of the fee. But the math matters.

For example, if a card has a $100 annual fee and earns rewards that are worth 1% of spending, you would need to earn more than $100 in rewards each year to come out ahead. At a 1% rewards rate, that means spending more than $10,000 in eligible purchases annually before the rewards outweigh the annual fee.

Annual fee ÷ rewards rate = spending needed to offset the fee

That calculation can help you compare whether a fee-based card is likely to provide value for your actual spending habits.

In short:

• Fees add to the total cost of a card
• Some fees are avoidable with responsible use
• Annual fees may be worth it if benefits outweigh the cost
• Evaluating total cost is key

Fees are about trade-offs. A card with more perks may cost more to hold, while a simpler card may have fewer fees and fewer premium benefits.

The most important credit card feature depends on how you plan to use the card.

• APR may be the most important factor.
  • If you expect to carry a balance month to month, focus on the cost of borrowing. A lower APR may help reduce interest charges over time. Rewards may be less important if interest costs are likely to outweigh the value you earn.
    • For example, if an unexpected expense requires several months of repayment, a lower-APR card may matter more than a rewards card.

• Rewards may become more valuable.
  • If you consistently pay your statement balance in full, you may be able to benefit from rewards without paying interest on purchases. In that case, it may make sense to compare cash back, points or travel rewards based on your spending habits.
    • For example, if groceries, gas or dining make up a large part of your monthly budget, a card that rewards those categories may provide more value.

• Fees and ease of use may matter most.
  • If you want a card that is easy to manage, look for simple rewards, low fees and clear terms. A straightforward card may be a better fit than one with rotating categories, complex redemption rules or an annual fee you have to work to offset.
    • For example, a flat-rate cash back card may be easier to manage than several cards used for different categories.

In short:

•  Carrying a balance makes APR more important
•  Paying in full makes rewards more useful
•  Wanting simplicity makes low fees and clear rewards more important

Choosing the right credit card starts with understanding your financial habits and priorities.

• Focus on APR for cost control
• Focus on rewards for value maximization
• Focus on fees for simplicity and total cost
• Focus on spending habits to find the best fit

Many people fall into more than one category. You may want rewards, but also want to avoid fees. You may want a low APR, but also want basic cash back. In those gray areas, prioritize the factor that has the biggest financial impact for how you will actually use the card.

If you're comparing credit cards, M&T can help you explore credit card options based on your goals, spending patterns and preference for simplicity or rewards, and an M&T representative could help you find your fit.

Credit cards can offer convenience, flexibility and value, but the right choice depends on how you plan to use the card.

•  APR is the cost of borrowing if you carry a balance
•  Rewards are the value you may earn from eligible spending
• Fees are part of the total cost of using or owning a card
• The best card depends on your spending habits and repayment patterns

Before you apply, compare the real impact of APR, rewards and fees. The right credit card should support your goals, fit your budget and be manageable over time.

Explore M&T’s credit card options or explore related articles to keep learning about credit, spending and responsible borrowing.