If you’re struggling to choose the right credit card, you’re not alone in this struggle. Due to the variety of options, it becomes quite difficult to choose the best of the best cards to meet your requirements.
Selecting the right credit card can be beneficial for you in many ways. Therefore, you should first look at your requirements and understand what is the main purpose behind acquiring a credit card. The credit card that best meets your needs will be the best option for you, so you should go with it.
In this article, we will guide you thoroughly on how to choose the best card. Let’s get started…
Which Credit Card is Best for You?
The straight answer to this question is that there is no such credit card available that truly fulfills the requirements of everyone. Each credit card comes with a different feature set that makes it a better option for one but not suitable for another. You might love it due to your credit, preferences, and other spending habits but others might find other options suitable for them.
Remember, a card that is best for your friend doesn’t necessarily mean it’s best for you as well. Don’t blindly go with his recommendations. So you will have to decide for yourself which card is better for you by keeping your own preferences in mind.
Understanding Your Needs For Choosing the Right Credit Card
The first and foremost step in this journey is to assess your financial goals, spending habits, and other priorities for making the right decision. You can consider the following factors:
1. Build or Improve Credit
If you are a new credit card user such as a student or an individual with damaged credit scores, secured credit cards might be the best option for you. You have to deposit refundable security around $200 to $400. If you use it responsibly, you can significantly build or improve your credit score.
Another advantage of this is that you don’t have to pay an annual fee for many beginner credit cards which keeps its cost low. So you can easily improve and maintain your credit history and qualify for better cards in the upcoming days.
2. Earn Rewards
Getting cash back rewards for the purchases you make every day might be another captivating thing to obtain a credit card. If so, you should go with Cash Back Rewards. You can easily win some cash back if you pay off your balances in full each month. So you can win 1% to 5% cash back on all purchases with flat-rate cards and some other category-specific cards pay higher cashback of up to 5% on some categories like groceries, dining, etc.
Similarly, if you love traveling, travel rewards are for you! You can earn points, some miles for flights, and some other benefits like priority boarding complimentary airport lounge access, etc. Some point-based rewards offer a variety of rewards such as gift cards, travel, and other things you like.
3. Save on Interest
Another important purpose of a credit card is to consolidate high-interest debt to a lower-interest balance. In such cases, a balance transfer card is the best option for you to get rid of existing debt.
Similarly, if you are planning large purchases, you should utilize 0% introductory APR offers. Some credit cards offer a 0% interest rate during their promotional timespan so you can make a big purchase without paying any interest.
4. Convenience
If you value convenience and luxury, some cards offer premium benefits such as travel insurance and free access to airport lounges. With the help of these cards, you will be reimbursed for non-refundable travel expenses such as flights, hotels, etc. if you cancel your trip.
Further, if your luggage is lost or you receive it late, your card will compensate for it. Similarly, you will get financial compensation in case of accidental injury during a flight. Simply, your credit card can protect you from unexpected expenses.
5. Maximize Business Benefits
Business credit cards are the best options for small businesses that want to streamline their expenses by earning different types of rewards. You can use them to tailor your business-related expenses such as advertising, office supplies, and travel.
Simply, whatever purpose you have, it should be as clear as crystal.
Once you know your needs, choosing the best credit card becomes extremely easy for you.
1. Consider a Card with more interest-Free Days
You should go with a credit card that offers more interest-free days.
For example, if one company is giving you 30 interest-free days and another one is offering you 50 days, you should go with the second one. The company that is offering more interest-free days might have a higher annual fee and interest rate as well, still, it is worth going with it.
2. Consider the Fees
You have to pay annual fees, late payment penalties, and foreign transaction fees in some cases for your credit card. Choosing a card with a low fee is not always a good option. You should choose a card depending on your need.
For example, if you use your card for purchases occasionally, a no-annual-fee card might be the right option for you. Similarly, if you make frequent foreign trips, you should go with a card with minimum foreign transition fees.
3. Evaluate Rewards
Credit cards offer different types of rewards such as cashback and extra miles for travel. You should choose a card that aligns with your needs. For example, if you travel frequently, you should go with a card that offers travel insurance and some other facilities related to traveling instead of going with a card that offers cashback for grocery store purchases.
4. Understanding APR
A card with a low APR is the best option for you if you carry a balance month to month. You can avail 0% APR offer for a few months to save on interest. However, if you pay off your full balance every month, the APR is a matter of no concern for you. Instead of this, you should focus on rewards and some other perks.
5. Compare Credit Cards
Compare their interest rate, annual or monthly fees, rewards program fees, etc. before making your final decision.
Wrapping Up
For choosing the best credit card, you must evaluate your spending habits first. Without knowing your needs, you will not be able to make the right decision. If you choose the right card and use it wisely, you can easily achieve your financial goals and you will enjoy the financial freedom that comes along with it!