When used wisely, credit cards have fantastic benefits, but when used irresponsibly, you can end up paying dearly for it. It’s kind of like a double-edged sword, but there are ways for you gain the knowledge necessary to ensure the best outcome when choosing your card.
Choosing the best credit card means knowing what your priorities are. Whether you’re focused on building credit or wanting perks with your card, there are many options to consider when choosing the credit card that’s best for you.
Are you working on building your credit?
Most companies use your credit score to decide whether to offer you one of their cards. Knowing your scores can help you when you apply for the card you want.
Once you know your score, you can apply for cards that are likely to provide approval. Knowing your score gives you a better chance of getting approved without receiving numerous hard inquiries on your report.
If you’re not ready to get a standard credit card, then a secured card might be your best option. This type of card allows you to build credit as long as you pay off your statement balance in full by its due date. If you go this route, you always want to make sure the credit card issuer reports your payments to the major consumer credit bureaus.
What will your purchases look like?
If you are looking for a card you can carry a balance on, your top priority should be a card with an introductory 0% APR offer on purchases.
Although this may be the best way to go to save money on interest, make sure to pay attention to when and how long the APR will apply. If the APR has an expiration date, then this could lead to late payments.
Do you need to pay down credit card debt?
If you have credit card debt, then an option could be a balance transfer card, which can help you pay it down. When considering a balance transfer card, think about:
- The rates you are currently paying
- Whether the new card has an introductory APR for transferring your balance
- The rate you’ll end up paying after the APR offer has expired, and
- Whether you will transfer a portion of your balance or the full balance, because it determines how much your balance transfer fee will be.
It’s always practical to estimate how much a balance transfer could save you before you apply for a new card.
What type of rewards are you looking for with your card?
If you are looking for a credit card that can help you get the best rewards, then you can prioritize the credit card’s reward programs to determine which one is best for you.
Cash back rewards can help you earn money back on your everyday purchases, while travel rewards offer options to earn travel points or miles.
Understanding the rewards benefits that best fit your lifestyle will help you make an informed credit card decision.
Compare Your Options
Knowing the best credit card for you is all about figuring out your financial needs or goals and prioritizing them to determine which card best meets your needs.
Once you’ve made your decision, you’ll be ready to research a specific product and compare offers and benefits so you can apply for your ideal credit card.
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