How to Choose the Perfect Credit Card

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.

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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.

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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.

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