Finding the best credit card is part art, part science.
No one credit card is better than everything else, in all categories or for all people. But by understanding your options and asking the right questions, you should find the best card that fits your spending habits and credit situation.
Choosing a credit card is a personal decision that should be tailored to your personal spending habits and goals, whether it’s accumulating points and miles for travel or cash back for everyday purchases.
Most importantly, you’ll only have to spend your credit card money to buy things you can buy with cash. And because you can pay it off without having a balance, you’re incurring high interest.
Think about your credit score.
The first thing you’ll want to know is your FICO score, because your FICO score, along with your credit limit, can affect the type of credit card you have and the interest rate you’ll pay. You can get credit reports and scores from the Credit Bureau and My FICO, or you can get this information through websites such as credit providers. Scores usually range from 300 to 850, or from very low to excellent scores.
If you have bad credit up to 580 points, you may need to consider a secure credit card. This type of card involves a deposit with higher fees and fewer benefits. Other options may include student credit cards for people who don’t have credit or base credit cards with co-signers.
On the other hand, a fair credit score of 600 points can open the door to conventional credit cards, and having good credit of 700 points or higher can help you get a bonus credit card that can attract higher interest rates.
Determine the type of credit card you need
There are three common types of credit cards.
A card that helps improve your credit when your credit is limited or compromised.
Cards that can save you money with interest.
Cards that earn rewards.
The best card for you is one with features tailored to your specific needs. For example, if you don’t travel much, the best travel card in the world won’t help you much.
If you want to create or rebuild credit: A student or secure credit card
Student credit cards, which are unsecured cards for college students who are unfamiliar with credit cards, are easier to get than other types of credit cards. The same goes for secured credit cards, which usually require a deposit of $200 or more. Your deposit will be refunded to you when your account is renewed or closed in good standing.
If you want to save on interest: Low interest rate, 0% APR or balance transfer card
If you plan to use a credit card for emergencies or if your income is irregular and you have an occasional balance, a card with a 0% APR introductory rate and continued low interest can be a good help. Balance transfer offers can help you pay off high-interest debts without any interest. If your credit is moderate or low, it may be harder to find these offers.
If you want rewards: Rewards, travel or cashback
If you pay your balance every month and get no interest, a rewards credit card is good for you. These cards usually have a higher interest rate, but offer more sign-up bonuses and give you back points, miles or cash back every time you spend them.
Think about how you use the card.
One of the most important things to consider when choosing a credit card is how rewards, perks and cash rewards for everyday purchases match your spending.
Some cards offer credit card rewards in a variety of categories, including food, groceries, travel, airfare, hotels and more.
If you’re considering getting a card that can be rewarded as part of your future travel rewards program, choose a card with a rewards category for the most spending. For example, if you often spend money on out-of-home meals or takeout orders, consider getting a card that gives you rewards points for eating out. Other cards can help you get cash rewards for everyday purchases, such as gas or groceries, and even for purchases online or on Amazon.
Think about your budget and spending habits before choosing which credit card to choose. It’s important to find something that accurately reflects your consumer habits and preferences to ensure that you get the most out of it.
Your budget can also be a factor in determining whether or not you should pay for the card as an annual fee. The annual fee for the card usually only pays for itself if you can get more value out of the rewards than you pay as a fee.
Determine interest rates and monthly charges
One of the basic rules for using a credit card is to pay your monthly balance on time. In particular, if you have a rewards credit card or an annual fee card, not to mention that it will affect your credit, if you don’t pay the bill in full, the rewards you end up receiving could be essentially canceled.
Before you apply, you should review the card’s terms and conditions and understand what costs and fees you will incur if you have a balance (interest rate on the card), miss a payment, or get a refund.
Find a card with the right authorizations
To find a card that meets your criteria, visit the websites of credit card issuers such as Visa® , Mastercard® and American Express® . You can also find it at individual banks such as Capital One® , Bank of America® and Citibank® .
You can often filter by what your credit card offers and the overall credit rating you want. For example, you can filter to see cards with bonus programs, travel benefits, annual fees or introductory fees, or ask to see cards for people with limited credit history.
Many cards offer some sort of sign-up bonus, such as contract credits or bonus rewards for new purchases within a few months of opening an account. Pay attention to all the terms and conditions of these offers, and explore additional benefits, such as reimbursement, guarantees, and commission credit, that credit card companies may advertise.
Apply for the best credit card.
Once you’ve found the right credit card, you can go to your card issuer’s website to learn more about the current terms and conditions and to check out promotions for new cardholders. A “Apply Now” button should appear to start filling out the application.
When you submit an application, you often know the results. If approved, you may be notified that you need to get the data immediately or complete the following steps while waiting for the card to be sent. If you are rejected, you will receive an email with your decision.
You have found the best credit card. What’s next?
Choosing the best credit card is an important decision, but don’t stop there. Use your cards correctly to make the most of your money. To get credit, fill out your monthly bill and don’t use too much available credit. If you have a 0% APR deal, stick to your repayment plan. And if you are trying to get rewards, use your card every day and pay your bill every month.
The credit card you choose will help you reach your financial goals in the cheapest and most efficient way possible, whether you’re trying to get a loan, borrow money or get rewards. Don’t settle for less. Find the best credit cards here.