What Is The Best Credit Card For You?

Choose a low APR or rewards, not both. If you need to transfer a balance or pay off a new purchase over time, that’s fine. Find a credit card with the lowest regular APR you can get and forget about rewards. When you’re sure that you will pay off your balance each and every month, then you can switch to a rewards credit card because you won’t care if it has a higher interest rate.

Understand how your credit score impacts your chance of approval. If your credit isn’t excellent, don’t apply for multiple cards that will turn you down. Doing so will only hurt your credit further. Look for a credit card designed for people with fair credit, or simply wait until your credit score improves.



Choosing the best credit card for you is easy if you know what your priorities are. Whether you’re focused on building credit or earning cash back, here’s what to consider if you’re wondering how to choose a credit card.When you sign up for a new credit card, chances are good that you'll be using that card for a very long time. 25 million Americans have kept the same credit card for a decade, while another 20 million have never changed the card they use.You'll probably have a long-term relationship with your credit card provider, so it's important to pick the best credit card for you. This comprehensive nine-step guide to how to choose a credit card will make the process easy -- so just work through the steps to find the right card for you.If you’re thinking about applying for a credit card, you’re probably wondering, what is the best credit card for you? The answer depends on your primary purpose for the card.It might be to build your credit, pay a lower rate for balance transfers and purchases, or get cash back bonuses, or other perks.Premium credit cardsThis type of cards comes with many benefits and exceptional services such as a high signup bonus, high rewards rate on your purchases, dedicated concierge service, complimentary airport lounge access, companion flight certificates and more.Cards with no annual feeThis type of credit cards has the highest variety and it often comes in combination with cash back, travel rewards, 0% intro APR period and low ongoing APR.Travel cardsIf you’re often traveling, your credit card options include general travel cards, airline cards, hotel cards and cruise line cards. Spending money on travel categories often has the highest rewards rate. This also applies for the points redemption — you get the highest value on travel-related redemption options.Travel cards also often come with no foreign transaction fees, meaning you’ll save money on fees when you spend with your card abroad.Cashback and rewards cardsDepending on the card, you will be paid back for your purchases in the form of cash or rewards at a certain predetermined time. Cashback cards are often used for everyday purchases like groceries, gas and dining, while rewards points are often used for travel rewards.Balance transfer credit cardsA balance transfer credit card could be a good choice if you have a large balance on a current credit card that you’re struggling to pay off. When you sign up for one of these cards, you get a low or a 0% APR for the first six to 21 months. When the intro APR period has expired, you will be expected to pay the standard APR, which at times can be quite high.Credit cards for bad creditSome credit card providers offer cards to people with bad credit rating. Usually, these cards come with no rewards, with relatively high APR and with an annual fee.Most are secured cards, meaning you have to make a refundable deposit that’ll act as your credit line. As you build credit, most providers will often upgrade you to an unsecured cardCredit cards for businessIf you are running a business on your own, you should look at the advantages of having a business credit card. It can make bookkeeping much simpler. You can also get extra cards for your staff to use for purchases, and you can even earn rewards on your purchases.Student cardsUniversity students can apply for a special student credit card that may offer cash back, a signup bonus or low APR. These cards are also good for building credit and entering the world of adulthood.Store credit cardsYou’ll often encounter cobranded store credit cards that come with benefits when used at the specific retailer. The highest benefit often comes in the form of deferred interest payments on your purchases if you pay the balance in full before the promotional period expires. But you can also earn cash back or points on purchases made at the store.If you plan to pay your bill off in full every month, then you'll want to maximize the rewards you earn by using your credit card often. That means looking a card that's well matched to your spending.Lots of credit cards give you bonus rewards points for certain kinds of purchases. Those spending categories might include:RestaurantsBusiness spendingTravel purchasesGasGroceriesYou want your card to fit your lifestyle, so look back at your past few months of credit card statements to see which types of purchases you make most often.Search what credit card offers you might be eligible for by checking your credit score. The better your score, the greater your chance of being approved for cards with better perks. Among ways to check your score:Many credit card issuers give cardholders free FICO scores.The three major credit bureaus (Experian, Equifax and TransUnion) sell credit scores.If the number isn’t what you expected, check your credit reports to see what’s causing the problem. You can then start figuring out ways to improve it, from changing your spending habits to disputing an error on your reports, if you need to. Federal law entitles you to one free copy of your credit report from each of the three major bureaus every 12 months.These are generally intended for regular credit card users, and the benefits vary between cards and how you use them. The principle is that the more you use your card, the more rewards you get.The person who benefits the most from this type of card is the transactor. Because these cards tend to have high APR, carrying your balance isn’t recommended.To make the right credit card choice, answer the following questions:What rewards are offered?How much do I have to spend to earn a signup bonus and do I normally spend that amount?How many points per dollar can I earn?Do rewards points expire?Once you have answered these questions, you’ll be one step closer to getting a solid credit card for your needs.You need to decide what your purpose is for getting a credit card, as this will shape your approach to finding the right one for your situation.If you want your credit card for general shopping, you'll likely be looking for a card with the lowest interest rate or the most generous rewards, depending whether you'll be carrying a balance. But, if your goal is to use the credit card for other purposes, such as debt consolidation or business use, you'll need to research different card options.Once you have an idea of what you're looking for, research the specific type of credit card that's of the most interest to find the best offers within that card category. Depending on your situation you may be specifically looking for:A balance transfer card if your goal is to consolidate credit card debt or reduce interest paid on existing debt.A cash back card if you want to get your rewards as a statement credit so you reduce your monthly bills.A card offering 0% APR on purchases if you plan to use your card for a big purchase that you won't pay off immediately and you want to save on interest.A business card if you hope to use credit as part of operating a company.A secured card if you are trying to rebuild credit after an adverse event, such as a bankruptcy .A travel credit card if you want to earn airline miles or points for hotels.An airline or hotel card if you want to earn points or freebies with a specific airline or hotel.A student credit card if you're still in school and just getting started building your credit.Armed with information about what kind of card you're looking for, you can move on to researching specific card offers.If you plan to carry a balance, a low interest rate should always trump sign-up bonuses and generous rewards programs. Since credit card interest typically tops 15% annually while you usually earn around 1% to 2% in rewards for most purchases, it's easy to see why you're better off prioritizing interest paid.This is especially true if you can find a credit card that offers you a promotional 0% APR on purchases. If you can repay what you borrow before the promotional rate expires -- or can transfer the balance when the rate rises -- you won't have to pay any interest.There are 3 types of credit cards:Cards that help you improve your credit when it’s limited or damaged.Cards that earn rewards.Cards that save you money on interest.The best card for you is one with features designed to fit your specific needs. If you don’t travel much, then the best travel card in the world isn’t going to do you a lot of good.If you want to save on interest or balance transfer cardA card with an introductory 0% APR and ongoing low interest could be a good match for you if you plan to use your credit card in case of emergencies, or if you have an irregular income and carry a balance from time to time. A balance transfer offer could help you pay off a high-interest debt interest-free. Keep in mind that these offers may be harder to find if you have average or poor credit.If you want to earn rewards such cash back or travelA rewards credit card is a good match for you if you pay off your balance in full every month and never incur interest. These cards typically have higher APRs, but offer larger sign-up bonuses and give you points, miles or cash back on every dollar you spend.If you want to build credit student or secured credit cardStudent credit cards, unsecured cards meant for students who are new to credit, are easier to qualify for than other types of credit cards. So are secured credit cards, which generally require a security deposit of $200 or more. Your deposit is returned to you when the account is upgraded or closed in good standing.Deciding between two or three similar cards can be quite difficult. Look closely for differences. All other values being equal, here are some factors that might set a card apart:For student or secure cardCredit limit automatically increases. Certain cards let you increase your limit after a few consecutive on-time payments.Interest paid on your deposit. Some secured cards place your security deposit in an interest-earning CD. This way, you can earn a small amount of money on it.For Rewards, cash back cards or travelLower required spending. The less you need to spend to qualify for a sign-up bonus, the better.No expiration date on rewards. On some cards, you can use your rewards as long as you keep the card open.When you finally pick a card, keep in mind that, on the application, you can include all income you have reasonable access to, not just your personal income. For students, that can include money from grants and scholarships, or allowances from parents. For others, it may include a partner or spouse’s income.For low interest or balance transfer cardsDebt payoff planner. Some issuers let you create your own debt payoff plan on an online portal, a valuable tool if you’re overwhelmed with debt.No late fees or penalty APR. Certain cards waive these charges. If you fall behind on payments, this could come in handy.There are different credit cards within each category of card, compare options carefully. Some of the key things to look for include:Rewards: How much do you earn on the card? It's typically pretty standard for rewards to equal around 1% to 2% of general spending. You may find more generous rewards for specific categories of purchases, such as 5% cash back on gas or groceries.Sign-up bonus: Many credit cards offer a special bonus for meeting certain requirements, such as applying for a card and spending $1,000 within a designated time.APR: This is the interest on the card you'll pay if you carry a balance. Many credit cards have a low promotional APR either for purchases or balance transfers, then interest goes up after you've had your card for around 12 to 18 months.Annual fee: There is sometimes an annual cost just to have a particular credit card. It can be worth paying if you'll earn enough rewards and perks to offset the cost of the fee.Other fees: Find out if you must pay a foreign transaction fee if you use your card while traveling abroad. You may also want to look into late fees in case of a missed payment; balance transfer fees if you plan to transfer a balance; or fees for cash advances if you need one.Minimum payments: Find out how much of your balance you're required to pay each month. Typically, you have a choice between paying a set minimum (such as $25) or a percentage of the balance due.Other perks: Does your card provide advanced access to concert and event tickets, or do you get roadside assistance? Does it offer rental car insurance or travel insurance? These are just some of the perks card issuers offer to entice customers to choose them.You may also want to find out if other customers have generally had a good experience with the card issuer by reading reviews or checking the consumer complaint database maintained by the Consumer Financial Protection Bureau.There’s no denying that credit cards are useful financial tools. People don’t even bother to carry cash when they have a credit card in their wallet. But if you don’t pay off your balance on time, the interest you’ll accrue may outweigh the rewards. Whichever card you choose, make sure to compare your credit card options until you find the perfect fit for your wallet.