Tips To Choose the Right Credit Card For You

  • 6 min read

There are numerous credit cards available on the market today. Rewards cards, secured cards, miles cards… the list is too long to name. How can you choose which credit card is right for you? If you haven’t ever had a credit card yet or your credit history isn’t very good thanks to a bankruptcy, a foreclosure, or just mounting debt from medical bills, then you need to work on rebuilding your credit. One of the most effective ways to do this is by using a secured credit card. In essence, it’s a pre-paid card where you put down a deposit of money, spend it, and then repeat.

This helpful guide will examine the questions you should ask yourself and what the answers to those questions mean for you.

Will I pay off my credit card every month?

If you have the ability to pay off your credit card monthly, then you should pursue some type of rewards card. From cash back on each purchase to reward points that you can redeem for goods and services, rewards cards help make your money stretch even further.

Do I plan on carrying a balance on my credit card?

If you are planning a big ticket purchase or want to consolidate some of your unsecured debt, like medical bills, into one location, then a credit card with a low annual APR makes sense for you. This will help you keep your accounts current, your payments affordable, and let you better manage the debt that you need to carry right now.

Do I have a lot of debt that I need to manage?

If you’re carrying a lot of debt on one credit card that has a high APR, then it makes sense to pursue a credit card that offers a balance transfer option. Even if you still carry two balances, you’ll pay less for awhile on the transferred balance and that can help you out of a budgetary crisis for awhile.

Do I plan on traveling a lot?

If you like to travel or your job requires you to travel a lot, then a credit card that offers airline miles as a reward may be the right choice. Purchases end up going toward the travel expenses of your upcoming vacation, whenever it might be, and the savings that you experience can help you visit places you normally wouldn’t go.

Do I have a limited income right now?

If you aren’t making much money right now, for whatever reason, then there’s a good chance you won’t be approved for a credit card. If you are, however, you’ll want to look for credit cards that allow you to skip a monthly payment or other debt management solutions that work with your limited income.

Finding the right credit card can literally mean the difference between a strong financial future or one that is near ruin. Use these tips to select the best credit card that fits your needs so that your credit score can be constantly building!

Selecting The Right Credit Card For Your Specific Needs

If you want to select the right credit card for your specific needs there are some important steps you need to follow in order to attain substantial results. There are a few questions that need to be addressed before we can proceed and the first is why do you want a credit card ?

Do you have a real need for credit or do you want to refinance some debt you are currently carrying ? After we have established what you are going to be using the credit card for we can start looking at the various options that are available.

No Annual Fee !

This is something we need to highlight right away is finding a credit card with no annual fee at all. The U.S. economy has some of the lowest interest rates in the world so banks are trying to boost their profits by charging customers an annual fee just to use their credit card but you shouldn’t bother with an annual fee unless you have really bad credit.

These banks are competing with each other to get your business and one way is by waiving annual fees for their clients. Something to really be on the look out for is banks that will give you the first year free but then hit you with an annual fee from the 2nd year onward.

Getting The Lowest Interest Rate Possible

Consumers may want to transfer the balance they are carrying from one credit card to the new one. In order to get the lowest rate possible, you need to check your credit score to make sure it is greater than 680. Once you have confirmed your credit score, call each of the credit card companies and ask them what is the lowest interest rate they can offer you.

When you have found the credit card companies with the most competitive interest rates, you need to find out what are their balance transfer terms and conditions. There will be some firms that will charge you a processing fee to perform the balance transfer and the promotional interest rates may climb after a predetermined amount of time, so it would be in your best interest to review all of the terms and conditions associated with these balance transfers before signing up.

Fringe Benefits That Come With The Card

Credit cards now offer more fringe benefits than in the past and one of the most important benefits is having access to either a cash back or point system.  Which do you prefer, points or cash back ? It would be prudent to compare all of the options that are available to you before you actually make a decision on which of these credit cards to apply for.

I truly hope you have benefited from the questions I have posed and hopefully you will be able to find the perfect credit card for your particular needs. Just remember: there is no such thing as “good debt” so only use credit if you can pay it back promptly.

nv-author-image

Christopher - BSc, MBA

With over two decades of combined Big 5 Banking and Agency experience, Christopher launched Underbanked® to cut through the noise and complexity of financial information. Christopher has an MBA degree from McMaster University and BSc. from Western University in Canada.