How to select the best credit card for you
Figuring out what credit card is best can seem like a decision with no right answer. It is easy to get overwhelmed with the sheer number of cards that are available and all the different perks and rewards programs. Should we look at the best rates, or the best rewards, how about the most convenient for us to use?
If you have wondered what kind of card you should get and have felt overwhelmed with the choices, this article is for you. If you are considering what card to get next, you will find the information in this article helpful as well.
Step number 1: What are you looking for in a credit card?
The first thing to decide is what the primary purpose of getting this card will be. Are you getting your first card? How about the first card in the process of repairing your credit? Are you looking for travel rewards or day to day purchasing rewards?
Once you have determined why you want to open this credit card you can select the appropriate card for you based on those goals.
Step number 2: Determine the type of issuer you want to work with
When getting a credit card it is important to find the right issuer for you. Small issuers will likely have easier approval standards but may not report as well on your credit report. Larger issuers have the stability to be in business for an extended period of time and report to all of the major credit bureaus.
It is also typically easier to work with institutions that you have existing relationships with or that you plan to maintain relationships with. Individuals often prefer institutions that provide better technology, allowing them to use online services to process the majority of their card needs.
Determining the type of technology the institution has, customer service they provide, and ease of accomplishing tasks are the key takeaways from this step.
Step number 3: Narrow the card selection based on your goals
This will likely be the longest part of the process for you. When you are narrowing your card selection down you should consider things such as the annual fees, rewards, cash back features, travel perks, rates, etc.
If this is your first card:
It is best to get a credit card that has no annual fee because you will want to keep this card for the rest of your life to maximize your credit score. The rate should not have much of an impact on your decision because ideally this card will not carry a balance. If you are going to find a card with rewards, it would be ideal to do a cash back card so you will not have to worry about points expiring or figuring out the best use for your points.
If this is a travel card:
When reviewing travel credit cards it is important to find a card that has no international transaction fees if you plan on doing any international travel in the future. After the international transaction fees it is important to find rewards to maximize the type of travel that you do. It is not always best to get a hotel or airline specific credit card for your rewards if you tend to use AirBnB’s or use multiple airlines.
Sometimes the best thing you can do is find a card with a lot of perks related to traveling. Some of the perks that are most commonly utilized are TSA precheck and Global Entry, increased restaurant rewards, refunds for travel expenses, and access to airline lounges.
If you are the type that likes to pay your travel expenses off as soon as you incur them then the rate does not matter, if you are the type that prefers to purchase your vacation on a card and slowly pay it off you will want to find the lowest possible rate.
If this is a daily use card, but not your first credit card:
This is where your rewards or rate can really pay dividends. If you are the type that only spends money on gas and groceries you can find cards that will give you 3–5% rewards on those purchases and 1% on everything else. The same thing goes for nearly every type of spending.
Step number 4: Applying for your card
By this point you will have your card selection narrowed down to 1 or 2 cards and you are ready to apply for them. When you apply for your card you will want to have your relevant contact information, social security number, income information, income documentation, etc.
Let me know how this article helped you select the card you chose and which card you wound up with in the comment section below.