There are tons of credit card choices out there offered by various financial institutions and let’s face it, it can be a little overwhelming. How do you know which one is the right one for you, amongst a sea of choices?
When it comes to actually choosing a credit card, the choice might not be so easy. Don’t fret. If you’re in the market for your first credit card or ready to add another one to your portfolio, here are three simple questions to ask so you can choose the best credit card for you.
What is your goal?
Before choosing a credit card, it’s crucial to understand your goals with using a credit card. Are you trying to establish or build credit? Is your goal to travel hack and use miles from a rewards credit card in order to get a free trip to Europe? Or do you want to find a card with no interest so you can do a balance transfer and work to pay off your existing debt? Your goals should inform your choices, not the other way around!
- A rewards credit card is good if you’re looking for cash back or miles
- A cash back card is good if you want some money back in your pocket for everyday purchases
- A travel rewards card that accrues miles is useful if you want to lower your travel budget or if you’re a frequent traveler
- A zero percent interest card can be used for balance transfers
Understanding your goals can help you choose the best credit card for you and ensure you stay on course with using credit cards responsibly — without just signing up for everything that comes your way.
What role will credit cards play in your finances?
While your goals are an important factor to consider when choosing the best credit card for you, it’s not the only thing to take into consideration. You want to examine what role credit cards will play in your finances.
Will you be using a credit card sparingly and only for emergencies? Will you use it for just the necessities or for all of your purchases? You want to know your credit card style to make sure it matches up with the type of credit card you get.
For example, you may have heard all the buzz about rewards credit cards and want to get some cash back or enough miles to travel the world. However, if you plan on using your credit card sparingly or just for the basics, you might not reap enough rewards to offset the cost. Many rewards credit cards come with an annual fee. In some cases, it might be waived for the first year, but then could be around $95 and up.
If you will be using your credit cards frequently and pay off your balances in full, a rewards credit card may be your best bet. On the other hand, if you rack up a lot of charges on your credit card and may end up carrying a balance each month, opting for a no or low-interest credit card, without an annual fee, will be best from a financial point of view.
Understand what role credit cards will play in your financial life so you can determine which one makes sense for you.
What is really important to you?
Ultimately, you want to find a credit card that works for you and makes your life easier. Before choosing a credit card, ask yourself what is really important to you. Here are some things to consider:
- Interest rates. Each card has a different interest rate and depending on your goals, it might be important to only apply for certain cards with no or low interest rates.
- Balance transfer. If you want to use a balance transfer card to consolidate your debt, it’s important to know about the introductory period, where the interest rate is typically zero percent for a limited time. In theory, you’d want to pay off your existing debt during this period.
- Rewards. When done right, credit card rewards can put money back in your pocket or help you take a vacation for next to nothing. Ask yourself which rewards (if any) will help you reach your goals and be most beneficial. Will cash go further in your budget or will extra airline miles get you where you want to go?
- Perks. Some cards may come with perks like access to your FICO score or travel insurance, whereas others may not.
- Accessibility. Not all credit cards are created equal. For example, cards like American Express and Discover aren’t widely accepted, whereas cards with a Visa or Mastercard logo typically are.
- Customer service. Do you want a card with great customer service? If so, read reviews online before applying.
Find the best credit card for you
There are a ton of credit cards out there to choose from, but not all of them are right for you. Instead of getting overwhelmed and discouraged by the seemingly endless options out there, ask yourself these three questions to help you decide what is the best card for you.
Once you’re ready to choose a credit card, check out our credit card section by category to find the best fit for you. Compare rates and offers — and remember, you’re never alone in the process. Our Equitee Select choices offer our best recommendations to make the process easier. Find your next credit card now.