Consumers these days are faced with a multitude of options in their everyday life. From what type of breakfast cereal to buy to what movies to watch to where to go on vacation, the possibilities can seem endless. While that may seem like a good thing, the number of choices consumers have can often feel overwhelming. This is especially true with financial decisions, such as which credit card to select.
Credit cards are an important tool in your financial journey and, when used responsibly, have many advantages. Not only do credit cards help to build your credit history, but they are generally also safer to use than debit cards since most of them have built-in fraud protection. Most credit cards also offer some type of rewards, whether cash back or discounts on certain categories of goods and services.
There are many different types of credit cards and credit card providers. Here are the steps to choose the best credit card for you:
1. Check your credit score: Different credit score levels allow access to different credit cards. Generally, the higher your credit score is, the more options you have and the better those options are. For example, if your credit score is 720, you may be eligible for certain credit cards that someone with a credit score of 590 would be declined for. So, getting an idea of your credit score is instrumental in understanding where to begin.
2. Figure out what type of credit card you’re looking for: There are many different types of credit cards out there that offer different things. A card that may be beneficial to someone else may not be the right card for you, so it’s important to understand which type of credit card you need. If you are wanting a card that offers good benefits and has a higher credit limit, you will be looking at a different set of credit cards than someone who is looking to build their credit for the first time. Understanding the reasons why you want a credit card will make it easier to select the one that fits your needs the best.
3. Determine how you plan on using your card: Are you planning on paying off the card balance in full each month, or do you think you will be spreading out the payments over time? If you do plan on paying the full balance off monthly, then you can take advantage of the interest free period – a period of time where you are not charged interest on your total balance – and so a card with a higher interest rate but better benefits may be right for you. However, if you are planning on spreading out your payments over time and carrying a balance, then you may want to look for a card with a lower interest rate.
4. Compare the different card options you have: Once you know what cards you are eligible for and what sort of benefits you want from your card, do some shopping around and compare the cards that fall under your criteria. There are several websites where you can compare several cards at once. Once you have found the card that best fits your needs, you can apply for approval.
In conclusion, while the vast array of different credit cards you may be eligible for can make your head spin, you can take control of the process by determining exactly what type of card is best for you and then shopping around until you find the one that fits your needs the most.