Finding the Right Credit Card to Suit Your Needs
What Credit Card Should I Get?
Most adults have at least one or two credit cards. However, if you are new to credit, you might be questioning how to pick a credit card that is right for you. It is normal to wonder this, especially if you have never given much thought to applying for a credit card. There are many options available out there, but which one should you apply for and which one do you truly need? It’s important to do your research so you can get the right credit card for your needs.
First and foremost, you should determine what your main goal is with a credit card. Do you travel by plane to many destinations for business or pleasure? Do you already have a credit history that is not exactly sparkling? Do you drive a lot? Do you want a credit card that gives you rewards just for using it?
You should think about the answers to those questions critically and thoroughly, as it can help you in your quest to find the best option. Now, let’s go over some advice to help you answer your question of “what credit card should I get?”
Check Your Credit
To truly know how to pick a credit card that is right for you, you must consider your credit score, and whether or not you have already established credit in the first place.
You can check your credit score for free online or with a service like Credit Karma or Credit Sesame. Learning your score can make it easier to determine whether you can qualify for low interest credit cards, various rewards cards, air miles cards, gas points cards, or credit cards specifically targeted towards people with poor credit scores. Some large retailers, such as grocery stores, even offer their own credit card applications. The bottom line is, you will qualify for more cards (and thus have more options available to you) if your credit score is good to excellent. In general, you also have a better chance of qualifying for cards with good perks if your credit is good.
Additionally, if you have an account with a service like Credit Karma, you can also be shown a list of credit cards for which you should qualify based on your credit score.
Consider the Type of Card You Need
There are three types of credit cards available: rewards cards, low interest cards, and credit cards that can help you improve credit that is damaged or limited. No matter which card you ultimately choose, it should be one that has features that meet your particular requirements.
For example, if you don’t drive, you wouldn’t need a gas rewards credit card. However, if your credit score is on the low side, you would benefit from getting one of the many credit cards for poor credit that are available.
It should be noted that student credit cards are often the best option for young adults (students) who are just starting out financially and may have little to no credit history. On the other hand, secured credit cards are often the best option when you need a credit card but have a poor credit history and low credit score. They can gradually help you to rebuild your credit score while learning valuable lessons on responsible usage.
If you drive frequently, gas rewards cards may be the best type of credit card for your needs. Likewise, if you rely on flying multiple times per year, you would want to take advantage of an Air Miles card.
Paying Off Your Credit Card
Of course, your goal should always be to strive to pay off your monthly credit card bill in full. However, if it is only within your means to pay off your credit card debt by carrying a balance (slowly paying off the balance with added interest), you should opt for a card with a low annual percentage rate (APR). Some companies even offer an initial 0% APR (annual interest rate) on purchases and balance transfers for a limited period of time after opening your account. This can be beneficial, as it gives you more time to pay off your debt, but only if you are confident you can actually pay off your total debt before the interest rate kicks in. The offer can be tempting, but sometimes it might not be the best option.
On the other hand, if you plan on transferring your balance from one card to another, it’s important to carefully read over the terms of a few different credit cards so that you can ensure it’s appropriate for you.
Once you have decided which type of credit card is best for you, you can narrow down your choices further. Explore a few cards with similar features, paying attention to any differences in terms, interest rates and limits, so you can apply for whatever one best suits your needs.