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Blogs > How To Look For The Perfect Credit Card For You
With so many options in the market, it is often confusing to choose a perfect credit card. Always prefer to choose the credit card with features like easy transferring of the credit balance, low-interest rates, reward points, cash-backs, travel points, etc. We have tried offering you insights that should make the process of choosing your perfect credit card easy.
Firstly, you should decide the purpose of applying for a credit card, as this will help you in choosing the perfect credit card. If you are looking for a credit card for general spending, you will be looking for a credit card with the most generous rewards or the lowest interest rate, depending on whether you will carry a balance or not. If you want to get a credit card for other reasons like consolidation of debt or for your business expenses then you need to research various card options. Creditors generally market different credit cards for different consumers. It makes sense to opt for a credit card, which has been tailored as per your need.
If your plan is to carry forward your existing credit card balance, always select a low-interest rate card in spite of choosing the credit card with features like big sign up bonuses and reward programs. The annual interest on your credit card is generally in two digits, while you earn around 1% to 2% in rewards for most of your purchases. This should be an eye-opener to why prioritizing a lower rate of interest is better. If a credit card offers a 0% annual percentage rate on purchases and you can repay what you borrowed before the promotional rate expires or can transfer the balance, you don’t end up paying high interest.
If you don’t want to carry a balance on your credit card, opting for a credit card that offers maximum rewards is a smart choice. There are various cards that offer bonus reward points for a specific kind of purchase. They have even tied up with various companies. Some of the examples –
⇒ Travel
⇒ Groceries
⇒ Shopping
⇒ Restaurants
⇒ Movie tickets
Based on your spending, you can choose a card that offers maximum reward points. You should choose the perfect credit card that fits your lifestyle, so it is better to go through the credit card statement of past few months, identify the trend and then choose the card that will be best for you.
When you shop for a rewards card, it is important to spend to a certain limit. It is also equally important to make sure that you avail of the benefits of reward points earned. If you are having a bunch of airline miles but you are not a frequent traveler, it has no use for it. Never use a credit card that makes you redeem your reward points as per their terms and conditions. You should make sure that a credit card should offer reward points that comes either with a long expiry or no expiry.
Make cashback credit card your go-to-go choice when you are trying to spend little, save more on your day-to-day expenses. You can also choose a credit card that lets you use the cashback in paying the credit card bill. If you are planning for a big road trip, a card that offers bonus reward points on fuel is the one to go for. You should think about the most valuable requirement for opting credit card.
Once you zero in on what you are looking for, you should start researching for that specific type of credit card. As per your situation, you may be looking for:
⇒ A credit card to consolidate your credit card debt or reduce the interest that you are paying on existing debt.
⇒ One that offers a 0% annual percentage rate, if you are planning to make a big purchase that you won’t be able to repay immediately and you do not want to pay the high interest.
⇒ A credit card that offers cash back. Especially if you want to use it to pay off a certain portion of your credit card bill.
⇒ One that offers airline miles or discounts on hotels.
⇒ A credit card that has tied up with a specific airline or hotel where you get miles, discount, freebies, and upgrades.
⇒ A secured credit card if you want to rebuild your credit report after an unfortunate event like bankruptcy.
Based on the information about what type of credit card you are looking for, you can go ahead and research offers on the specific credit cards.
You can see that there are different credit cards within each category. So it will be better if you compare the options carefully. Some of the things you should look for:
⇒ Low rate of interest
⇒ Rewards and bonus reward points
⇒ Minimum payments
⇒ Sign-up bonus
⇒ Annual fee
⇒ Other Fees
⇒ Other perks like airline miles, discounts, freebies, and complimentary gifts.
You should also read a review of a specific credit card based on the experience of other consumers.
To choose a card with no or low annual fee is a big dilemma. Most of the credit cards offer no annual fee based on minimum spending or has a aim to build up your credit . Sometimes, paying a nominal annual fee can save you from high expenditure, which might push you into more debt. It might also get you a low rate of interest. The sign-up bonus, interest on late fee payments should also be kept in mind while choosing a credit card.
A credit score is an important factor when applying for a credit card. What if you choose your perfect credit card but cannot qualify for it because you have a low credit score. You can easily find out the minimum requirement to qualify for a type of credit card, by checking your credit score prior to applying. These days, creditors offer a platform to check your credit score for free and based on that give you a credit card offers to make it easier for you.
Checking your credit score is a pre-requisite step in the process of applying for a credit card. Once you have your credit card, it is not mandatory to use the same card forever. Based on your requirement, you can always opt for a new credit card or an add-on card.
Previous Article: Tips For Using Your Credit Card Responsibly
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