5 Steps for Picking the Best Credit Card

In 2017, it was recorded that there are nearly 5,000 FDIC-insured banks in the United States. There are even more credit cards! With so many to choose from, how do you determine which one is best for you and your financial situation? No one credit card is better than the other. But before you make a decision, take a moment to cover all your bases by asking yourself the following questions.

1. What’s My Credit Score?

If you don’t know your credit score, you won’t know what credit cards you’re eligible for. This will help you narrow down your options. Luckily, there are dozens of free ways you can access this number. Services like Credit Karma and NerdWallet allow you to check up on your score without hurting it.

2. Why Do I Want a Credit Card?

Different cards offer different benefits to users, so it’s critical to choose the one best suited for your needs. Most cards will aid you in one of the following three areas:

  • Build or rebuild credit: Secured credit cards help you build up credit. They require a deposit, which is usually refundable, that acts as your credit limit. These cards are typically meant for young people who don’t have any credit, or those wishing to fix their credit. Secured cards are a way to prepare your credit for larger financial decisions down the line, like loans.
  • Finance a purchase: Credit cards can be a beneficial way to finance a purchase. Cards that offer low introductory annual purchase rates are a great tool, as long as you use them smartly. These rates generally only last for a certain period of time. If you can pay off the balance of your purchase in full before then, this may be something to consider.
  • Gain rewards: A ton of credit cards have built-in travel perks or cashback programs. You can earn a range of bonuses with each dollar you spend. Explore different cards so you can determine which rewards suite your spending habits and lifestyle best.

3. Which Card Offers Me the Most Value?

When deciding between a few similar cards, take into account what you’ll get out of it. This includes what the card is offering you – like rewards programs or a boosted credit score. If you plan on buying groceries or gas with it, then you should look into cards with everyday cashback offers. This goes hand-in-hand with the purpose of your credit card.

4. Did I Double-Check the Fine Print?

Before you commit to a credit card, you’ll want to take a closer look. 

  1. Is there an annual, cash advance, or late payment fee?
  2. Does it include a fixed or variable APR? 
  3. What’s the balance transfer rate?

Make sure you understand the requirements that come with the card before you sign on the dotted line.

5. How Often Can I Pay it Off?

Sometimes, you’ll need to make a large purchase on your credit card. You’ll have to carry the balance on your credit card until you can pay it off. This isn’t really a bad thing, but paying off your card every month shows creditors that you’re financially responsible. Take this into account before you select a card.

Now That You’ve Narrowed it Down…

You can start building your credit, earning rewards, and more. Remember to swipe responsibly.

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