There are so many different types of credit cards available that it can be tricky to decide which credit card would be best for you. Everyone has different spending patterns and bill payment habits, which means that some credit cards may be more suitable for you than others. Here are some questions to ask when looking for the credit card that would best suit your circumstances.
Do You Already Owe Money on Credit Cards?
If you already have credit card debt, it may be a good idea to look for a balance transfer credit card. A balance transfer credit card enables you to transfer existing credit card debts onto one card and then benefit from an interest-free period. During this period, you will not have to pay any interest on the amount of money you have transferred to the card. This interest-free period will give you some time to reduce your consolidated debts without having to worry about paying interest.
However, you may have to pay a fee for transferring your existing balances to your new card. You may also have to pay interest on purchases that you make during the interest-free period.
Do You Have a Low Credit Score or No Credit History ?
If you have never had a credit card before, it is a good idea to build up a credit history, especially if you plan to apply for a mortgage in the future. Similarly, if you have a low credit score, you will need to rebuild your credit history. You can achieve both of these objectives by applying for a secured credit card.
Secured credit cards require you to make a security deposit when applying for the card. The security deposit is at least a few hundred dollars, and your initial credit limit will be equal to your security deposit. The credit card company retains this deposit, which they will use to cover your bill if you default.
You use a secured credit card in the same way as a standard credit card. Your payment history is reported to the credit bureaus, enabling you to build or rebuild your credit history.
Do You Pay Off Your Balance in Full Every Month?
If you pay off your balance in full every month or almost every month, does your current credit card give you any rewards? If not, it would be worth applying for one of the many credit cards that offer cash back, travel-related benefits, or other rewards.
If you regularly shop at certain stores, why not choose a card that will pay a higher percentage of cashback on your purchases at these stores. If you travel frequently, you may prefer a reward card that credits you with “miles,” which can be redeemed for flights, car rentals, and other travel-related expenses.
Before applying for a personal credit card, decide which type of card would be most suitable for you both now and in the foreseeable future. Then, compare at least three different cards of this type in order to decide which of these would offer you the best deal.