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There are so many credit cards to choose from, it can be overwhelming to decide which one you want. You can make this process much easier by learning how to choose a credit card. We will walk you through each step and answer your question “Which credit card is best for me?”
Here’s how to choose a credit card in four steps:
1. Pick the type of credit card you want
There are many different credit card types out there. A big part of how to choose the right credit card is understanding how credit cards work and which type of credit card is the right fit.
It’s much easier to choose the type of credit card that you want once you have decided what card you will use. An airline frequent traveler will need a different card than a student building credit.
The first step to choosing a credit card is to determine your primary reason for applying. When looking for the best credit cards for me, I ask myself what I use them for. You will likely discover that you only choose a credit line for one of these reasons.
If you want to know how to choose a credit card because you have a low credit score or no credit history yet, then credit cards for bad credit are a good place to start. Many of these are secured credit cards, which you open by paying a deposit to the credit card company. If you’re in college, student credit cards are another option.
Redeem points on your purchases
Rewards credit cards are a popular answer when consumers ask themselves, “What is the best credit card for me?” These cards allow you to earn rewards for your spending. If you want to earn cash rewards, you should look at cashback credit cards. For points, you can redeem toward travel, check out travel rewards credit cards.
Pay off purchases over time without interest
If you have one or more expenses that will take you some time to pay back, 0% intro APR credit cards are just what you need. These cards offer a 0% intro APR (annual percentage rate) on purchases.
You can find out how to choose the right credit card with a low intro APR. The length of the introductory period will help you decide. It may last up to a year, depending on which card you choose. The APR will rise once it expires, so aim to repay your entire balance before then.
Save money on credit card debt
Balance transfer credit cards help you pay less interest on your debt. These cards offer 0% intro interest rates on balance transfers, not purchases, just like 0% intro rate cards. Transfer your credit card balance to a balance transfer account with a 0% intro rate.
According to research by The Ascent, the average credit card balance reached $5,897 in 2020. Knowing how to choose a credit line with balance transfer offers can help you save a lot of money if you have this type of debt.
2. Figure out the most important features
Next, choose the credit card features that are most important to you. It will all depend on which credit card you are getting. This guide will help you choose the right credit card for your needs.
Credit cards to improve credit
Here are the top priorities for credit cards with bad credit.
There is no annual fee: Credit cardholders don’t have to pay any additional costs.
Payments reported to all three credit bureaus: The three consumer credit bureaus are Equifax, Experian, and TransUnion. All three produce credit reports which get used to calculate your credit score. A credit card company should report your payments to each credit card company to improve your credit score.
Free credit score monitoring: Credit score monitoring is free Many credit cards companies offer a credit score tool that can be used to monitor your credit score. It’s updated every month. This is an easy way to check if your score has increased.
Secured credit cards should also offer the possibility to graduate. Graduation occurs when your secured card is upgraded and your deposit is refunded. This is important as it allows you to get your deposit back and not have to cancel the card.
Reward credit cards
You might be interested in learning how to choose a credit card that offers cashback and travel rewards. Here are some features that will help you choose a credit card that earns rewards.
Reward rate: A card’s earning of rewards for purchases. Some cards earn flat rates, such as 1.5% on all purchases. Some cards earn more in bonus categories such as 3% for dining and 1% for everything else.
Welcome offer/sign-up bonus: This bonus is available to all new cardholders. The bonus is usually given to those who spend at least $1,000 per month. A card might offer $250 for spending $1,000 within the first three months. Not all rewards cards have sign-up bonuses.
An annual fee for the card: This can range from $0, in the case of no-annual-fee credit cards, to over $500. The best way to find the best credit card is to weigh the benefits it offers against the annual fee.
There are also two other features to check out if you want to know how to choose a credit card for travel:
How to redeem travel rewards: Travel rewards can be used for travel purchases. However, the specifics of how it works depend on which card you have. You should ensure that it is easy to book the travel you desire with any travel card.
There are no foreign transaction fees: You do not want to pay extra for international transactions. While most travel cards do not have foreign transaction fees it is a good idea to verify.
0% intro APR credit cards
When choosing a credit card that offers a 0% intro rate, be sure to consider the length of the 0% intro rate. You should have enough time to pay for the purchases that you make during the intro period. You can look for the longest intro APR at 0% if you aren’t sure how long.
Sign-up bonuses or rewards can be used as tiebreakers to determine which credit card is the best for you if multiple cards with 0% intro APR are available.
Balance transfer credit cards
You should pay attention to the length of the 0% balance transfer offer. You should look for a balance transfer card that has a 0% intro APR. This will allow you to pay off your debts. If this is not possible, you can choose the card that has the longest 0% balance transfer rate.
If two cards have the same balance transfer fee, they are important. If you’re stuck on how to select a credit card for balance transfers and one has a lower balance transfer fee, then that’s the clear choice.
3. Compare your credit card options
This is the most important part of how to choose a credit line. Now it’s time to have some fun. You can now compare the top credit cards from the same category.
Let’s suppose you are looking for cash-back cards. The best credit cards to earn cashback would be the ones you choose. Next, look at the cashback rate, sign-up bonus, and annual fees for each card.
Comparison tools are a great way to speed up your process of choosing a credit card. Here’s one:
- Go to The Ascent’s Compare Cards
- Click “Full card list.”
- Choose your credit rating and the type of credit card you’re looking for.
- Click “Add To Compare” under the credit cards you want to compare.
- When you’re done selecting cards, click “Compare.”
This will provide a complete breakdown of the cards. This will allow you to quickly see which cards have the lowest annual fees and which ones earn the most rewards.
4. Apply for the credit card you want
Once you’re done choosing a credit card, here’s how to apply for a credit card:
- Go to the credit card page and click the “Apply Now” option.
- Enter the required information. Credit card companies usually require your personal information, mailing address, and financial information.
- Apply and wait for a response.
You should receive approval within minutes. You can expect your card to arrive in the mail within 7-10 business days if approved.
There are two possible outcomes. Your application may take longer to be reviewed by the card issuer. You can still wait to receive a decision. This decision will be sent by mail or email. You can also contact the person to follow up.
If your application is denied, you can call the credit card company’s reconsideration line to see if it will change its decision. You could also apply for another credit card. The process of choosing a credit card is much easier once you are familiar with the basics.
Also read: Best CRM
How your credit score impacts your chance of approval
How you choose a credit card is important. It affects the cards you are eligible for. Credit cards are designed for consumers with a certain credit score. Your credit score must be within the range to have a good chance of getting approved for a card.
For example, the best credit cards are usually reserved for those with good or excellent credit. A credit score of 670 is a prerequisite for good credit. So, if you want one of the top credit cards good credit, you should have a credit score of 670 or higher. If you need to raise your credit score, check our guide to improving your credit score for steps you can take.
Your credit score is essential to determine which credit cards you can afford. There are plenty of ways to get your credit score for free online. I recommend using a credit score tool that provides your FICO(r) Score. This is the most popular scoring model. This type of credit score is available for free.
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