There are over 370 million credit cards accounts open across the nation. If you’re going to get your first one or thinking about switching to a new one, how can you make sure to make the right choice?
Credit cards are convenient for when you don’t have cash on hand. They also travel well and many are accepted around the world.
Some give you rewards, like travel mileage and cash back offers. While they’re fun to have and easy to use, however, they can affect your ability to get an apartment, a new car, or more if your credit score suffers.
Want to make sure you get the best one? We’ve got eight great tips for picking credit cards that will make sure you sign up for the one that works best for you!
- Check Your Credit Score
Before you start searching for the right card, you need to see what your credit score is. That score can affect how high your APR rate is going to be, whether you’ll be eligible for any benefits, and more.
There are plenty of free credit report companies you can sign up for. Remember, searching for your score can ding your score, too, so go with a reputable service.
Don’t think you have a credit score because you’ve never had a card? Think again — if you’ve ever paid bills or rent, you could still have a score.
- Consider Beginner Cards
There’s no shame in starting from the bottom and working your way up. You might find that you don’t qualify for a car with all the bells and whistles you want and a beginner card is your best bet.
Those without a credit score or limited credit history might do well with a starter card. While you might not get the rewards you want or a huge credit limit, many times you won’t have to pay an annual fee and you’ll be able to work towards a higher score.
Beginner credit cards include cards that require a cash deposit, student credit cards, and even some store credit cards. See what your options for cards for beginners are and find out if you pre-qualify.
- What do You Want to do?
The next step in picking your best card is figuring out what you want to do with it. Besides using it to shop, your credit card can do a lot for you.
Besides looking into how does credit repair work, your card can help you build up a damaged score. A card with a small balance that you faithfully pay off makes your credit score climb.
Want to make a big purchase? Finding a card with a cash sign up bonus can help you pay it off.
Don’t let your card be lazy. Figure out what you want from your card and then make it work for you.
- Pick Your APR
No matter which card you choose, you’re going to have to pay attention to the interest rate. If this is your first card, you might have to settle for a higher rate as well.
Credit card interest rates can go up into the thirties. If you end up with a 30% plus APR, paying off your credit card in full will keep your fees low.
Expect to have a balance on your card for a while? Aim for the lowest interest rate possible to keep your payments manageable.
The average American carries over $6,000 in credit card debt. Don’t let your payments pile up; find a low interest rate.
- Penalties, Fees, and other Expenses
Don’t expect to just sign up for a new credit card, get one in the mail, and go. While it can certainly be simple to get a credit card, you need to find out if they charge any kind of fees, penalties, or other expenses.
For example, some cards ask you to pay an annual fee. The rewards might be worth it, however.
Some cards won’t stop you if you go over your limit or pay your bill late. They will, however, make you pay a penalty.
- Applying for Your New Card
You finally know which one you want and you’re ready to apply. There are many ways to do it although the process usually follows a template.
You can apply for a credit card online, by post, at a bank, or even right at the store themselves. You’ll be asked to fill out an application with your personal information.
Make sure your information is exactly at it appears on any bank statements and legal papers. Credit companies will use these details to check out your credit score and see if they can trust you.
- If They Say No
What happens if the credit company decides not to grant you a card? There are ways to find out how they made their decision in order to figure out your next step.
Ask which credit reference agency they used to find out more what they saw in your report. You might have more luck applying for a card with a lower limit.
- If They Say Yes
Congratulations! You’ve got a new card — but your responsibilities are just beginning.
Do everything you can to avoid paying any fees or penalties. If you use your card responsibly, you can avoid racking up a lot of credit debt.
If you do have a balance that carries over month to month, don’t just pay the minimum. Try to pay more and keep your credit score in good standing.
Picking Credit Cards the Right Way
As you can see, there are a lot of factors that go into picking credit cards. By keeping these tips and tricks in mind, you’ll find the best one for you.
Remember, use it responsibly. Figure out why you want your card, aim for one with a low interest rate, and avoid paying fees and penalties at all costs.
Managing your money can be stressful. If you want to do it right, we’re here to help.
Check out all of our other finance articles to keep growing your green.