Choosing a card is not as easy as it seems. In fact, it can be quite a daunting task.
This, though, should always be kept in mind: no one credit card is better than the other. It all depends on your needs, your spending habits, and where you are financially.
With that said, it’s important that you have a full understanding of what credit card options you have and which one is the best for you. The process usually requires being able to ask the right questions.
Check your credit status
First of all, check where you stand when it comes to finances. What is your credit score? What credit cards are you eligible for? Generally, the better your credit score means you have more options and a higher rate of approval. Also, the better your score, the more perks and better benefits you can get with your card.
So the first step to choosing a credit card is knowing your status first. Get a FICO rating.
Should you find some issue in the credit score presented to you, you can always do some investigating. Dive into your credit reports and find out what’s causing the problem. By doing so, you will be able to identify which areas you need to improve on to bring your scores higher.
What is the type of credit card you need?
Ask the right questions, and this right here is one of those questions that you should definitely bring up. There are generally three types of cards:
Cards that assist in improving your credit when it’s limited or damaged
Cards that save you money
Cards that earn rewards
From these three, identify which one would be of great benefit to you and would be fit with your spending habits and needs.
If your goal is to rebuild damaged credit, you may want to get a secured credit card to start. Secured credit cards usually require a $200 deposit or more. This deposit is returned when your account is upgraded or closed with good standing.
Cards with an introductory 0% APR and low interest rates are best for people who only plan to use their card in emergencies or those who do not have a steady flow of income. A balance transfer to this card could help pay off a high-interest debt.
If you plan on paying your balance full every month or if you travel a lot, a rewards credit card is typically what’s best for you. These cards usually have higher APRs but will store your rewards which you can then use later on instead of incurring more credit on the card.
Again, ask the right questions
Don’t be afraid to ask because how else would you be able to arrive at a decision other than getting fully educated on the matter?
Some of the most important questions you need to ask are the following:
What will I use this card for? And how often will I be using this?
How much will it cost to open an account?
Is there an annual fee for this card? If so, how much?
How long is the 0% APR period?
What is the ongoing interest APR?
Can I do a balance transfer? What are the policies surrounding it for this card?
Does this card offer rewards? If so, how do I earn them and for how long are they valid?
These questions should give you an overview and idea of what the best credit card is for you.
Get the card that will bring you most value
Once you’ve narrowed down your options, then of course, it’s only logical to get the card that will be of most value to you.
Choosing a card is difficult, but that’s not really the real challenge. After you’ve received your credit card, make sure your mind is set on using it the right way. Remember, you went through all that hassle to pick a card so you can save and enjoy the perks – not to get drowned in bills and more debt (especially when your goal was to do a balance transfer).
You should keep in mind that whatever card you choose should be able to iron out your finances and help you achieve your financial goals. In the end, it’s how you handle your money that matters.