In the Market for a New Credit Card? Read These Tips to Help You Choose

• Author: Chris Goyette
• Posted: 2024-08-27

Finding the best credit card for your personal needs can go a long way in helping you to meet all of your financial goals. The best choice for your situation largely depends on your credit score and what you hope to get out of the card. Here are a few things to consider when choosing the best fit for your needs and preferences.

 

Understand Your Credit Score

Your overall credit score will influence the cards that you are able to use. The better credit score that you have, the greater your chance for being approved for multiple credit cards. There are a number of different ways to check your credit score, including using the three primary bureaus of Experian, TransUnion, and Equifax. It is always a good idea to regularly monitor your credit score.

If your credit score is holding you back from securing the card that you want, you can work on improving this number. This includes checking for potential errors on your report.
 

Decide What Type of Card Suits You Best

Once you have a good idea about what type of card you will qualify for, you can determine what card will best suit your needs. If your goal is to repair or build credit, you will likely need to start with a secured card. You can also consider a student credit card if you are just getting started in your financial journey. While these cards generally require a deposit, this money is returned when the account is upgraded.

A low-interest or 0% APR balance transfer card is a good option if your goal is to save on interest. These types of cards are also recommended for consumers who only plan to use the card in the case of emergencies or if you know that there is a chance that you might carry a balance occasionally. A balance transfer card is a good choice if you are looking to pay off a debt without incurring extra interest.

Lastly, a rewards credit card is typically a solid choice if you know that you will pay the balance in full each month and not be faced with interest charges. While these cards usually come with higher APRs, they provide benefits in the form of points or rewards. This helps you to make your card work for you.
 

Ask the Best Questions

Now that you have determined what classification of card will serve you best, it is time to narrow down your options by asking the right questions about the particular cards available to you. For instance, if your goal is to build credit, you will want to find a card that reports your payments to all of the three major credit card bureaus. Another good question to ask is how much it costs to open a new card? Will you be charged an annual fee? Can you upgrade to a better card if your credit improves? All of these are valid questions when first getting started.

If your credit card will serve you through its rewards programs, you will want to do your due diligence to research this component. For example, choose a card that provides the best rewards in the categories that you typically prioritize in your life. Frequent travelers will be served well by a card that offers airline or hotel rewards while those who want to sock away money should look for straight up cash rewards. It is also wise to investigate how quickly you will accrue these rewards. While this can be cumbersome to research, your efforts will pay off in the form of a better yield on your rewards.

Conversely, a card used to pay off debt will need to have a low APR. Be sure to also look into the card's balance transfer rules such as what kind of debt you can roll over and what the limit entails.



Once you have secured the best card for what you need it to do, it is time to be responsible about its use. Being smart with how you use your card is an invaluable way to improve your financial picture both now and in the future.