It is never easy to determine which credit card is the best for you. A single credit card cannot be the best in all the categories, and it cannot be the best choice for every individual. It does not mean you cannot find a perfect one. Assess all your options and ask the right questions, and you will find a credit card, which is the best suited to your credit situation and spending habits.
Consider the following steps to pick the best credit card for you:
Check your credit:
The very first thing you should check is your credit score to reveal what credit card offers you can get. You can gain cards with better benefits if your credit score is impressive.
How you can check your score:
• Use an online platform with access to credit scores.
• Take aid from the credit card issuers to gain access to free FICO scores.
• You can buy credit scores from the three main credit bureaus, which are Experian, TransUnion, and Equifax.
In case the number is different from what you were expecting, you should gain access to your credit reports to reveal the root cause of poor credit score. It will help you in finding the tactics of improving your credit score. You may need to alter your money spending habits or file a dispute to correct an error on that report if it exists.
Keep in mind that if you have an existing mortgage, banks will often offer credit monitoring as a free service.
You can gain one free copy of your credit score from one of three major credit bureaus within every 12 months, as permitted by the federal laws. So, gain access to your free credit reports at AnnualCreditReport.com because it is a federally approved platform for free credit reports.
Know what type of credit card will meet your demands:
You can find three different types of credit cards:
• Credit cards which work to improve the credit when the card is damaged or limited.
• Cards that offer extra savings on interest.
• Credit cards which provide the user with specific rewards.
One of these three types of cards is best for you. It will be the one which meets your specific demands. Suppose you do not travel a lot, the best travel card will never benefit you. It must help you in the way you spend your money. Therefore, you should assess the cards in great detail! These tips will also work when it comes time to locate the best auto loan.
Choose Student or Secured Credit Card If You Are Willing to Build or Rebuild Credit:
Student credit cards or unsecured cards are designed for college students who do not know a lot about credit. They can easily qualify for unsecured credit cards but not for the others. The secured credit cards usually seek a security deposit of $200 or more than this amount. Whenever the cardholder closes or upgrades their account that the deposited amount is returned.
When You are Willing to Save On Interests:
When your goal is to save on interest, you should choose a card with 0% APR. You can continue using this card with low interest if you are not going to use that card too frequently. It is also an excellent solution for those with irregular income. However, users with poor or average credit can find it very difficult to find balance transfer offers for paying off high-interest debt.
When You Seek a Card with Rewards:
If you can pay off the card balance altogether every month, a reward credit card is the best choice for you. You get these cards with higher APRs, but simultaneously these cards also offer a more significant sign-up bonus and additional points, cash back, or miles when you spend your money.
Ask the right questions to narrow your options:
Go online and use a credit card comparison tool to find the type of card you want to use. Credit card comparison platforms offer filters to reveal the best cards as per your credit score and regular expenditures. Ask the following questions when you get your top picks.
When you are planning for student and secured cards:
• Is this card going to support me in building my credit? Search for a credit card that regularly shares credit card payment reports to one of three major credit bureaus.
• How much money will it require to open an account in addition to the annual fees for maintaining the account? You may not get rewards high enough to apply for a yearly fee. Secured cards come with the credit limit equal to the amount you have deposited; therefore, this type of card is considered the best for students.
• Can I upgrade to a better card in the future? You should pick a credit card which allows the users to build their credit and graduate to a card with much better perks. It will help you in keeping the same account in the long run with more benefits.
For low interest:
• What will be the 0% APR duration, and what will be the ongoing APR interest? Try to find a card that offers you sufficient period to pay off your debt without incurring any interest. If you plan to carry balances for many years, choose a credit card with minimum ongoing APR.
• What “balance transfer policy” is applied to the card? Check the card balance transfer fees before you make a balance transfer. Reveal the type of debt you can move and whether a limit is applied to how much you can transfer. Note: A credit card’s balance transfer APR can be quite different from the purchase APR.
• Will the card offer rewards? If you are not seeking more than a few months of 0% APR, you can easily find a card that provides ongoing rewards.
For Rewards: Cash Back or travel cards:
• What are my spending habits? Search for a credit card that provides the best rewards on things you like to buy the most. You should choose a card with an annual fee if you spend a lot of money because the credit card rewards can counterbalance that fee. If you frequently travel abroad, nations, choose a card that does not apply foreign transaction fees and equipped with a chip-and-pin feature instead of a chip-and-signature feature.
• Is that credit card too complicated? You should select a credit card with flat-rate cash-back rewards if you do not want to deal with complicated terms and conditions. Keep things simple and focus on the money you gain as cash-back.
• How fast can you earn rewards, and what is the value of those rewards in monetary terms? You should check reward valuations before you choose any credit card for rewards.
Select a credit card with the highest overall value:
The last tip will lead you towards two or three best cards designed for you. Now it is going to be quite confusing to choose between these two or three similar credit cards. You may probably have found a clear winner after the third tip. If not, then this fourth step will lead you towards a perfect credit card.
Carefully consider differences when other values seem equal.
Consider the following factors during the final selection round…
When you are seeking Student and Secured Cards:
• Select a credit card that automatically increases the credit limit. The card issuer can increase the limit after receiving on-time payments.
• Select a card that provides interest on the deposited amount. Some credit cards offer interest on the money you deposit when applying for a secure credit card.
When looking for cards with low-interest, 0% APR or Balance transfer Cards:
• Debt payoff planner. Some credit card issuers allow the customers to build their unique debt payoff plan on an online website. This online tool is proven quite helpful when the debt is exceeding quite fast.
• A card with no penalty APR or late fees: Some credit cards leave such charges. In case the customers fail to make the payment within the required timeframe, this feature makes things easier.
When you want rewards:
• Lower required spending. Select a credit card that provides a sign-up bonus on minimum expenditures.
• Long-lasting reward policy. Find a credit card that allows you to keep the rewards as long as you want.
When you have finally selected a credit card, keep certain things in mind when applying for the card. You are allowed to fill the details on all kinds of incomes you have. Students, for example, can share details regarding the money gained from grants and scholarships. Students can also describe the allowance they obtain from their parents. Other individuals can share their spouse or partner’s income.
You have got your card, what’s next now?
Time to re-organize your auto financing and continue to tackle your personal finances like a pro! Yes, it is a bit tough and quite essential to find the best credit card, but things are not over yet. It would help if you learned how to use that card in the best possible way to prevent troubles and poor credit score. If your goal is to establish credit, you must pay all your bills every month. Avoid using too much of your credit and strictly follow your debt payoff plan. That credit card must help you in achieving your financial goals. That’s how it can be beneficial and useful for you.