Cheap digital cameras are great for kids or in casual situations where the best image quality is not required. The ability to tweak a digital image after uploading into a computer mitigates many of the deficiencies of cheaper cameras such as sharpness, contrast and color saturation. However, resolution measured in megapixels climbs ever higher with each generation, meaning that relatively inexpensive cameras still provide good quality images even if they aren't quite as good as stills from pricier units.
1Resolution: Resolution with any digital device is measured by the amount of pixels found on the unit's charge-coupled device, or CCD. This image sensor electrically captures and converts the image data into digital values, for processing and storage on a memory card. Measured in megapixels or millions of pixels, always look for the highest number. Be aware, however, that a high megapixel count is only one factor in image quality, with lens quality and low-light-level performance other critical factors. A good starting point for inexpensive digital camera megapixel count is 3 to 3.5 megapixels, although models such as the Nikon COOLPIX S3300 offer 16 megapixels while remaining relatively inexpensive.
2Lens Quality: Better manufacturers known for lens production such as Canon and Nikon make excellent optics. Carl Zeiss and Leica, makers of optics for high-end professional cameras, telescopes and military rangefinders, also license versions of their products on cameras spanning many brands and price ranges. Look for these proven performers when shopping for inexpensive digital cameras. A good example of a camera that merges low cost and high lens quality is the Canon PowerShot A2300. Better lenses offer better depth of focus and less chance of color fringing, also known as chromatic aberration. Better lenses are ground to a finer and more accurate level, allowing the CCD to capture more light in low-level environments and produce a better, sharper image.
3Memory: Some digital cameras offer a set amount of internal memory, but it's usually fairly small. Make sure that memory expansion is possible when shopping for cheap digital cameras. Most digital cameras use memory cards such as SD and Compact Flash, which offer multiple gigabytes of storage to fit hundreds of high-megapixel images without having to carry multiple cards. Fujifilm's FinePix AX550 offers an SD card slot that also accepts higher-capacity SDHC and SDXC memory.
4Optical and Digital Zoom: Zoom on digital cameras comes in two iterations: digital and optical. High-digital zoom figures are easy to produce and are often rolled into the optical zoom figure, producing an impressive sounding "total zoom" number. Be wary of this when shopping for inexpensive digital cameras, focusing primarily on optical zoom. This relates to how far the lens physically moves forward and back, and creates lower distortion than digital zoom. Digital zoom simulates optical zoom, cropping the image and reducing image quality. Excessive use of digital zoom means you are not using the full resolution your camera is capable of, resulting in blurry or smeared images. The cheapest digital cameras only offer digital zoom with fixed lenses. Good optical zoom figures for smaller cheaper cameras ranges from 3 to 12x, with better numbers offered by units such as the Canon ELPH 530, with 12x optical zoom teamed with a 10.1 megapixel sensor.