Credit cards are popular for several reasons. Cardholders can make purchases from a source that’s not linked to their personal bank account and be rewarded for these transactions. There are many credit card companies, each offering a variety of credit card programs. With each company and particular credit card, the terms and rewards on offer are different. Therefore, it requires a lot of thought and assessment of needs and benefits for you to get the credit card that suits you. In this article, you will find simple steps that will help you determine which credit card is right for you. This is How to Choose the Right Credit Card:
Start with your credit score
The first thing that determines the type of credit card you should apply for is your credit score since. Credit cards with the best perks are only approved for individuals with excellent credit scores. However, there are credit cards designed for individuals with relatively low (not bad) credit scores. For credit card holders, FICO scores can report can be accessed through companies like Experian.
If this is your first credit card application, you can get your credit score from the main credit bureaus, Transunion, Equifax, and Experian, for free. Take the necessary steps to improve your credit score if it is low.
Now, what benefits serve you best?
In general, there are three types of credit cards based on the benefits they offer to consumers which are secured cards, low-interest-rate cards, and rewards cards. Secured cards help individuals improve their credit scores. Low-interest rate cards allow users to save on the interest they pay on the balance they carry. Rewards cards allow people to get cash rewards back on various purchase categories.
Define your needs then narrow down your search within the type of credit card that best serves them. Be very specific during this process. Once you begin your credit card search, you will find many suitable options. Start by asking yourself the following questions to make sure your decisions are not misguided during the selection process:
- Is this my first card and will be used to help build my credit history?
- Will I be using this card to make a big purchase or just normal expenses?
- Do I have a pre-existing credit card debt I need to pay down?
- What reward type benefits me the most, cashback or travel reward miles?
Upon answering these questions, you will be able to narrow down the choices. However, choosing between the final few suitable cards is often the most challenging part. The goal is to select the one that offers you the most combined value.
Credit cards are a great financial tool to have in your toolbox if used properly. However, the value you get from your credit card boils down to how well it fits your particular needs. Make sure to compare different cards and companies before applying for a card. If you are concerned about getting approved for credit cards you can apply and see if you pre-qualify for cards like the Capital One Bank Platinum Card without an effect on your credit score.
Once you have read How to Choose the Right Credit Card and identified the best credit card for you, be sure to read “How to Apply for a Credit Card So You’ll Get Approved.”