It can sometimes seem a little overwhelming if you’re considering which new credit card to get. There are hundreds of cards from which to choose, and each one comes with different perks and limitations. Several factors normally go into picking the right credit card. We’ll talk about some of the most important ones right now.
1. Your Credit
Before we get into how to select a credit card, we should mention that once you have your card, you’ll want to use it responsibly. If you don’t, you might need to look into credit card refinancing vs. debt consolidation somewhere down the line. As long as you don’t overextend yourself with your cards, though, you can usually avoid having to take these actions.
Your credit score is the first thing you’ll need to look at as you begin your credit card shopping journey. With a higher credit score, you should have many more card options than would otherwise be the case. If your credit isn’t so great, you can probably still get a card, but fewer choices will be available.
2. Credit Card Comparison Websites
Next, you can shop around on credit card comparison websites. Several sites list and compare credit cards, and they can help as you narrow down your selection. If you’re interested in a particular card feature, you might use that keyword as part of your search. Something like “best credit cards for cash back” or “best travel cards” would be examples.
3. Rewards
Many individuals look at rewards as one of the most vital aspects of the credit card they opt to select. If you wish to emphasize a particular reward, such as cash back, airline miles, or something else, look for that in the card description. You should also look at whether the rewards ever expire and if there are any limits regarding how many points you can earn. You can also see whether the card company has any restrictions on how you can redeem your points to ensure you can use them in ways that make sense for you.
4. Credit Limit
You can look at the card’s credit limit next. Some people might consider that more essential than what rewards you can earn. If you have good credit, that usually means you can get a card with a higher limit. If you don’t max out the card and pay the balance every month, you can also usually raise your limit as time passes.
With a lower credit score, your options should consist of cards with a lower limit. If you prove yourself with disciplined spending, you can probably raise that limit eventually if that appeals to you.
5. Interest and Fees
There’s one more area you’ll want to consider when evaluating credit cards, and that’s interest and fees. Read the fine print and note what fees you’ll need to pay if you do a balance transfer, request a cash advance, or pay late. Some cards will have higher fees than others.
You should also look at how much interest the card company will charge if you can’t pay the balance each month. The annual percentage rate, abbreviated as APR, often varies depending on which card you get. Comparing card APRs needs to be part of your selection process. The lower the advertised APR, the better it is for you as the cardholder.
Pick the Right Card for Your Situation
Your situation and needs should dictate which card you select. Start by checking your credit score, since that will determine the cards for which you can apply and look at comparison sites based on a targeted keyword search.
Then, look at each card’s interest rate and fees, the credit limit, and whether the rewards program appeals to you. All those factors should go into your decision. If you’re systematic about your search for a new credit card, you will likely end up with the one that is best suited to you.