Right now there are numerous types of credit cards available to consumers. Options are great, but they can be overwhelming. How do you know which one is best for you? What should you be looking for when choosing a credit card? In a previous blog post we discussed different types of credit cards. Now that you know the basics, here are some steps to take when considering which credit card is perfect for you:
Figure out your needs for a credit card
There are so many types of credit cards with different criteria that may or may not be advantageous for you. Take time to examine your goals, budget, and credit standing so you can look for a credit card that will best suit your needs. Are you planning to pay your card off in full every month? Looking to do a balance transfer on outstanding credit card debt to lower your interest payments? Searching for the card with the best perks? First you need to take stock of what it is you actually want to do with a new card.
Check your credit score
In a previous blog, the importance of credit scores was explained. Lenders look at your credit score and credit history to determine your creditworthiness. Some credit cards are only available to those with good-to-excellent credit, while other cards are tailored specifically to those with no credit history or a poor credit score. Make sure you check your credit score before applying for a new credit card. Then you can tailor your search from there.
Compare the benefits that are offered
Some of the benefits credit cards offer are generous new-customer promotions, cash back rewards systems, or travel incentives. Most credit cards will offer one major benefit or perk, meaning you are unlikely to find a card that offers everything you want. Compare all the perks side-by-side to assess which ones are most important to you.
Know the fees and interest rate
Ask yourself if you can afford and are willing to pay annual fees. Again, when applying for a credit card, you have to examine the pros and cons of each one, and what you are specifically looking to get out of it in terms of offers, as well as the annual fees associated with them. Oftentimes cards that carry an annual fee are the ones that offer the most lavish perks, while no-annual-fee cards may only have basic perks. By estimating how much you will use the card, you can easily and quickly calculate whether the perks will cover the annual fee.
The Bottom Line
Depending on the type of consumer that you are, certain credit cards will be more appealing. Once you have carefully reviewed your options, you can begin the process of applying for the credit card that will best fit your financial needs, credit profile, and goals. There are websites that can assist you when you are trying to deduct your choices and will lay out the pros and cons of credit cards. With credit cards, just be mindful of the importance of paying bills on time. Lenders want to know that you can be responsible with repayments. The biggest obstacle might just be taking time to do research, which will be extremely helpful in the long run.
Taylor Hoffman is an SEC registered investment adviser with its principal place of business in the State of Virginia. Any references to the terms “registered investment adviser” or “registered,” do not imply that Taylor Hoffman or any person associated with Taylor Hoffman have achieved a certain level of skill or training. Taylor Hoffman may only transact business in those states in which it is registered /notice filed, or qualifies for an exemption or exclusion from registration /notice filing requirements. For information pertaining to the registration status of Taylor Hoffman or for additional information about Taylor Hoffman, including fees and services, please visit www.adviserinfo.sec.gov.
The information contained herein is provided for informational purposes, represents only a summary of the topics discussed, and should not be construed as the provision of personalized investment advice or an offer to sell or the solicitation of any offer to buy any securities. The contents should also not be construed as tax or legal advice. Rather, the contents including, without limitation, any forecasts and projections, simply reflect the opinions and views of the author. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change without notice. There is no guarantee that the views and opinions expressed herein will come to pass.
This document contains information derived from third party sources. Although we believe these third party sources to be reliable, Taylor Hoffman makes no representations as to the accuracy or completeness of any information derived from such third-party sources and takes no responsibility therefore.
Taylor Hoffman is not a Public Accounting firm, and the information contained herein should not be construed as tax advice. Rather the contents included are a reflection of the view and opinions of the author. There is no guarantee that the information provided fits every situation, and individuals should consult their tax advisor for more specifics.
Taylor Hoffman is not a law firm, and the information contained herein should not be construed as legal advice. Rather the contents included are a reflection of the view and opinions of the author. There is no guarantee that the information provided fits every situation, and individuals should consult their attorney for more specifics.