The Beginner's Guide to Choosing the Right Credit Card

Posted : June 06, 2017

choosing the right credit card

The Beginner's Guide to Choosing the Right Credit Card

With so many credit cards out there, finding the right one for your life can be difficult. Check out our guide to choosing the right credit card here!

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Choosing the right credit card can be a mind-numbing experience if you do not know what to look for.

However, credit cards are too useful to ignore. They are handy for everything from ordering online to building up your credit score for a future auto loan.

So, out of all your choices, how can you determine which one is best for you?

Well, we put together a quick guide that explains the process for choosing the right credit card.

Look at Your Credit Score

A higher credit score enables you to get approved for higher quality credit cards with more perks and benefits.

This is why it is best to begin the process by checking your credit score to get a better idea of what options are available to you.

You get one free credit report every year.

Familiarize Yourself With the Characteristics of Credit Cards

The first thing you will likely notice is the interest rate, which often appears as the annual percentage rate (APR). You will also notice that some credit cards have a fixed rate, whereas others have a variable rate.

Next, credit card companies will often send you offers that your potential credit card limit. Most of the time, however, you will not get to see your actual limit until the credit card company reviews your credit history.

Many credit card companies also offer incentive programs to their customers. These often include rewards for travelers.

Determine Your Ideal Credit Card Type

This is the most critical step in the process. Before you can choose a card, you need to think about what features are important to you.

Generally speaking, a credit card will fall into one of three categories:

  • Credit cards that help you build or rebuild your credit
  • Low-interest credit cards
  • Rewards credit cards

Each has its own advantages and disadvantages.

If you have owned a credit card in the past, look closely at your habits.

For example, if you tend to pay your balance in full, opt for a rewards card. However, if you carry a balance from month to month, consider a low-interest credit card, but look out for interest rate spikes after the teaser rate.

If you need to build up your credit, a secured credit card is probably the best option for you. You can also consider a student credit card if you are still in college.

Narrow Down Your Options

If your goal is to build credit, look at the annual fees and security deposit. Also, if you are opting for a secured card, make sure that the company reports your payments to one of the major credit bureaus.

For low-interest cards, check to see how long the 0% APR period lasts. Additionally, some credit cards waive late fees or penalties.

If your main focus is rewards, choose the option that offers rewards that you will use. Next, look to see how quickly your rewards will kick in.

Choosing the Right Credit Card Made Easy

Choosing between your options is a lot simpler when you know how to approach the process.

If you need to, you can even carry two credit cards. For instance, you can keep a low APR card for costly purchases and a rewards credit card for your smaller items.

If you are still having trouble choosing the right credit card, our credit card comparison tool makes it easy to find the card that best suits your needs.