How To Find The Right Credit Card For You
With the wide variety of credit cards on the market today, figuring out which one to apply for can be intimidating. Luckily, there are several questions you can ask yourself that will help dramatically narrow the field.
Photo Courtesy: [Pixabay]
What's Your Credit Score?
By finding out whether your credit score is excellent, good, average, or low, you'll be able to focus on applying for cards designed for people in your score range. This is important, especially if you're trying to build better credit, as applying for multiple cards in a short period of time can actually lower your credit score.
Before you start card shopping, check out Annualcreditreport.com, where you can access your score from all three major credit bureaus each year.
What's Your Goal?
Besides enjoying the perks of credit, what are your other reasons for applying for a credit card? Some common reasons include things like:
- Establishing or improving damaged credit- If you are a young person who is looking to establish credit with your first credit card, then a student card is a great bet for you. If you're out to repair a less than flattering credit score, look into secured cards, which usually require an initial security deposit. Both of these types of cards tend to be easier to get approved for.
- Saving money on interest- If you have excellent or good credit, then be sure to look for a card with a 0% introductory APR and low interest after that. These can be great cards for either occasional use or for balance transfers that can help you pay off another card without worrying about high interest.
- Earning rewards when you use your card- If you rarely carry over your monthly balance, then a rewards card can come in handy. If you travel, then a card that rewards you with travel miles could save you money in the long-run. Otherwise, go for the best cashback rewards card geared towards your credit range.
Will A Certain Card Help Meet Your Goals?
Once you've narrowed down your goals, it'll be far easier to decide whether a particular card is right for you. Ask the following questions about each card you consider:
- Does this card report to the three major credit bureaus? If you're trying to build your credit, then this is important to consider because you'll want to get credit for responsible usage.
- What's the opening and ongoing APR? A 0% APR is great, but how much will your annual interest be after that?
- What's the card's balance transfer policy?
- Will you realistically use the card's rewards program (if it offers one)? How complicated are the program's terms?
While the first three questions will hopefully narrow down your options a great deal, here are some considerations to help you chose between your top few choices.
- If the card requires an initial deposit, does it earn interest?
- Does the credit limit automatically increase if after a certain number of timely payments?
- Does the card have late fees or penalty APRs?
- If the card offers a rewards program, do points or rewards ever expire?
- Is there a sign-up bonus? If so, how much do you have to spend to earn it, and is it worth it?
On : 12.15.20