How to Choose the Best Credit Card

How To Choose Wisely Credit Card 2022

      Selecting the best credit card for you is easy, if you know what your priorities and needs are. Whether you're focused on building credit, or getting your cash back, here's something to consider if you're wondering how to choose a credit card.

When you sign up for a new credit card, you are most likely going to use the card for a very long time. Approximately 25 million Americans have kept the same credit card for a decade, while another 20 million have never changed their card.

You may have a long term relationship with your credit card provider, so it is important to choose the best credit card for you. This guide on how to choose a credit card will make the process a lot easier, so just follow the steps to find the right credit card for you.

     If you are thinking of applying for a credit card, you may be wondering, what is the best credit card for you? The answer depends on your main purpose in using the card.

It might be to build up your credit, pay lower rates for balance transfers and purchases, or get a cashback bonus, or some other perks.

The Types of Credit Cards

Premium Credit Card

This type of card has many great benefits and services such as high sign-up bonuses, high reward rates for your purchases, special concierge services, free airport lounge access, accompanying flight certificates, and more.

Card without annual fee

This type of credit card has the highest variety and is often combined with cash back, travel rewards, 0% early April period and continuous low April.

Travel Credit Card

If you travel frequently, your credit card options should include general travel cards, airline cards, hotel cards, and cruise line cards. Spending money on travel categories often has the highest reward rates. This also applies to points redemption — you get the highest score on the travel-related redemption option. Travel cards are also often without transaction fees overseas, meaning you will save costs when shopping with your card abroad.

Cashback and gift cards

Depending on the card, you will be paid back for your purchases in the form of cash or gifts at certain times. Cashback cards are often used for everyday purchases such as groceries, gasoline, and food, while reward points are often used for travel rewards.

Balance transfer credit card

A balance transfer credit card can be a good option if you have a large balance on your current credit card, which you are struggling to pay off. When you sign up for one of these cards, you earn a low APR or 0% for the first 6 to 21 months. When the intro APR period has expired, you are expected to pay a standard APR, which can sometimes be quite high.

Credit cards for bad credit

Several credit card providers offer cards to people with poor credit ratings. Typically, these cards come with no rewards, with a relatively high APR and with an annual fee. Most are guaranteed cards, meaning you'll need to make a refundable deposit, which will act as your credit limit. As you build credit, most providers will frequently upgrade you to an unsecured card

Credit card for business

If you are running your own business, you should see the advantages of having a business credit card. It makes bookkeeping simpler. You can also get extra cards for your staff to use for purchases, and you can even get rewards for your purchases.

Student card

University students can apply for special student credit cards, which may offer cash back, sign-up bonuses, or low APRs. These cards are also great for building credit and becoming an adult.

Save Credit Card

You'll often find branded store credit cards which have benefits when used at certain retailers. The highest benefit is often in the form of a deferred interest payment on your purchase, if you pay off the balance in full before the promotion ends. But you can also earn cash back, or points from purchases made in the store.

How To Select The Proper Credit Card For You

Check your shopping habits

If you plan to pay your bills in full each month, then you'll want to maximize the rewards you get for using your credit card frequently. (forbes.com) That means looking for cards that match your spending.

Many credit cards provide you with bonus reward points for certain types of purchases. These categories of expenses may include:

- Restaurant

- Business expenses

- Travel purchases

- Gas

- Food material

You want your card to fit your lifestyle, so look back over the last few months on your credit card statement to see what types of purchases you make most frequently.

Check Your Credit

Find out what types of credit card offers you might qualify for, by checking your credit score. The better your score, the better your chances of being approved for a credit card with better perks.

How to check your score:

Many credit card issuers offer FICO scorecard holders free of charge. If the amount is not what you expected, check your credit report, to see what is causing the problem. Then you can start looking for ways to fix this, from changing your spending habits, to addressing errors on your reports, if necessary. Federal law provides you with one free copy of your credit report from each major bureau every 12 months.

Benefits of Credit Card Rewards Programs.

These are generally intended for casual credit card users, and the benefits vary between cards and how you use them. The principle is the more you use your card, the more rewards you will get.

To make the right choice of credit card, answer the following questions:
1. What prizes are offered?
2. How much money should I spend to get the signup bonus and,
3. Do I typically spend this amount?
4. How many points per dollar can I get?
5. Will reward points expire?
Once you answer these questions, you'll be one step closer to getting a solid credit card for your needs.

Decide for what purposes you will use the credit card.

You need to decide what your goal is to get a credit card, as this will shape your approach to finding the right credit card for your situation.

If you want your credit card for general shopping, you may want to look for the card with the lowest interest rate or the highest reward, depending on whether you'll be carrying a balance. However, if your goal is to use your credit card for another purpose, such as debt consolidation or business use, you might want to research different card options.

Research which card is right for you

Once you know what you're looking for, research the most attractive types of credit cards to find the best deals in that card category. Depending on your situation, you may specifically be looking for:

- Balance transfer cards, if your goal is to consolidate credit card debt, or reduce the interest paid on existing debt.

- Cash back card, if you want to get a gift as a statement of credit, so you can reduce your monthly bill.

- Cards that offer 0% APR on purchases, if you plan to use your card for large purchases that you won't be paying for immediately, and you want to save interest.

- Business card, if you want to use credit as part of company operations.

This card is safe if you're trying to rebuild credit after a bad event, like bankruptcy.

- Travel credit card, if you wish to earn airline miles or points for hotels.

- Airline or hotel card, if you want to earn points or free with a particular airline or hotel.

- Student credit card, if you're still in school and just starting to build up your credit.

- Armed with the information about the type of credit card you are looking for, you can proceed to research the specific card offers.

Identify the type of credit card that is right for you.

There are three kinds of credit cards

1. A card that helps you increase your credit when it is limited or damaged.

2. The card that gets the prize.

3. A card that saves money with interest.

The right credit card for you is one with features designed to meet your specific needs. If you don't travel very often, even the best travel cards in the world won't do you much good.

If you want to save interest, or balance transfer cards.

A card with a continuous 0% APR introduction and a low interest rate could be the perfect match for you if you plan to use your credit card in an emergency, or if you have irregular income, and carry a balance from time to time. Balance transfer offers can help you pay off your high-interest debt without interest. Keep in mind that these offers may be more difficult to find if you have average or poor credit.

If you want to get rewards such as cashback or travel

Reward credit cards are perfect for you if you pay off your balance in full each month, and never charge interest. These cards usually have a higher APR, but offer a larger signup bonus and earn you points, miles, or cash back for every dollar you spend.

If you want to make a student credit card secure.

Student credit cards, an unsecured card aimed at new students, are easier to qualify than other types of credit cards. The same goes for secured credit cards, which generally require a security deposit of $200 or more. Your deposit is returned to you when your account is upgraded or closed in good faith.

Apply for the card offering the highest overall score

Deciding between two or three of the same card can be a tough act. Take a good look at the differences. Here are a few factors that can differentiate a card:

For students or safe cards

Credit limit automatically increases. Certain cards allow you to increase your limit after several timely payments in a row.

Interest is payable on your deposit. Some safe cards place your security deposit on a CD that generates interest. This way, you can earn quite a bit of money from it.

For Gifts, cash back cards or travel

Lower costs are required.

The less you need to qualify for a signup bonus, the better.

There is no expiration date on gifts. On some cards, you can use your rewards as long as the card stays open.

When you choose a credit card, keep in mind that, in the application, you can enter all the income you reasonably have access to, not just your personal income. For students, it can be money from grants and scholarships, or allowances from parents. For others, it might include a spouse's income.

For a low interest or balance transfer card

Debt payment planner.

Some publishers let you create your own debt repayment plan on online portals, a valuable tool if you are overwhelmed with debt.

No late fees or APR penalties. Some cards waive this charge. If you are lagging behind in payments, this can be useful.

Minimum payout: Find out how much of your balance you need to pay each month. Usually, you have a choice between paying a set minimum (such as $25) or a percentage of the balance due.

Other benefits: Does your card provide advanced access to concert and event tickets, or do you get roadside assistance? Are there travel insurance or rental car deals? These are just some of the facilities that card issuers offer to entice customers to opt for it.

You may also want to find out if other customers have generally had good experiences with card issuers by reading reviews or checking the consumer complaints database maintained by the Consumer Financial Protection Bureau.

Remember This When You Pick Up Your Credit Card

Choose a low APR or reward instead of both.

If you need to transfer balances or pay off new purchases from time to time, that's OK. Find a credit card with the lowest regular APR you can get and forget about the rewards. When you are sure that you will pay off your balance each month, then you can switch to a gift credit card because you will not care if it has a higher interest rate.

Understand how your credit score influences your chances of approval.

If your credit is not good, don't apply for multiple cards that will turn you down. Doing so will only hurt your credit even more. Look for credit cards designed for people with fair credit, or just wait until your credit score improves.

Summary

Choosing the best credit card is an important decision, but don't end there. Use your credit card the right way to get the most from your money. If you're trying to build credit, pay your bills in full each month, and don't use too much of the available credit. Stick to your debt service plan if you land a 0% APR deal. And if you're trying to collect gifts, use your card for everyday purchases and pay your bills in full each month.

There is no denying that a credit card is a useful financial tool. People don't even bother to carry cash when they have credit cards in their wallets. But if you don't pay off your balance on time, the interest you'll be charged may outweigh the rewards. Whichever card you choose, be sure to compare your credit card options, until you find the one that fits your wallet the best.

There are countless credit card offers out there, but which one is the best for you? The answer will depend on your needs and credit worthiness, which is based on your credit history and credit score.