Anna Scott

Every person in life has different situations to deal with financially. Similarly, each credit card has benefits for different people. The key is to analyze your situation and discover which of the many options is best for your specific situation and will help you accomplish your needs. 

The following are four important considerations while searching for your ideal credit card that can make an impact on determining which card is optimal for you. 

The All-important Credit Score

Simply put, credit card companies want to know that you can be trusted to repay any money they provide you. The single most important method they use to determine how reliable you are is your credit score.

This score is a number compiled by different variables that relate to how well you have managed to pay your bills, whether you were able to do so in a timely manner, and whether you had a difficult situation such as a bankruptcy that could make you a risk.

The higher your credit score, the better the chance that you will be able to get a high-quality card with great rewards and a good APR% (Annual Percentage Rate) of interest for repayment. A number from approximately 600-700 is considered good, and above that is exemplary. 

Here’s how you can check your score: 

  • The Equifax, Trans-Union, and Experian credit bureaus offer one free check a year and sell them beyond that
  • You can get a free FICO credit score from many credit card companies
  • Nerd-wallet offers free access to your credit score

Note: Receiving multiple rejections from credit card companies can sometimes damage your credit score, so be cautious. 

Determining the Best Card By Shopping Around

There are three primary types of cards that you can choose when deciding what you need in a card. Here is an explanation of what they are and questions to ask to determine if these are right for you.

Credit Builder Cards  

If you have a low credit score, your best bet is to build it up so you can work your way toward bigger and better cards. There are several methods available for you in this regard, most of which do not require a credit score since the purpose is to improve yours.

  • Secured credit cards – These cards require a deposit, which will function as your credit limit. This ensures that you already have the amount you need to cover any transactions before you make them. 
  • A Chime Card – Chime is a financial banking technology app that works with FDIC insured banks to provide banking services. They have a credit builder card which is easy to use and is as simple as transferring however much money into that credit account as you want and that serves as your balance. 
  • Student Credit Cards – These cards, such as Discover Student Card, build credit for beginners and require little in terms of approval requirements.

What To Consider?

  • Does the card you are considering actually report to the credit bureau? Some secured cards don’t so make sure of this before choosing it. 
  • What is the deposit and the annual fee? Are they manageable for me?
  • Will I be able to upgrade this card or move to a better one later?

Highest Value Options

  • Automatic Credit Increases
  • Allows you to collect a small amount of interest on your deposit

Low-Interest Cards

These are cards with 0% APR or low monthly interest requirements, or possibly cards designed to do a balance transfer to help manage debt. 

Can a balance transfer to an existing credit card affect credit score? Not unless you do it frequently by opening new cards. 

If you are having trouble determining whether this process can improve your situation, you could consider the MSE credit card balance transfer site. Money-Saving Expert provides a lot of great tips and calculators to help you decide. 

What To Consider?

  • How long is the 0% APR period? Is it long enough for my purposes?
  • If you plan to do a balance transfer, check the associated fees to make sure that doing this will actually make your payments better and not the same or worse.
  • If I only need a small 0% APR period, could I perhaps find a card that satisfies those requirements and offers rewards?

Highest Value Options

  • No late fees or APR penalties
  • Provides a planner to help organize your debt payment plan

Rewards Cards

Rewards cards are top-tier cards that provide you with points, miles, or percentages of your money back to save you money the more that you use them. There are  a multitude of benefits to having these cards, but you need to have a high credit score and have demonstrated trustworthiness.

What To Consider?

  • Find rewards cards in which you will get the most benefit. If you rarely fly, why get an Airline rewards card when you could find one that you will use frequently?
  • What is the reward rate and value for this card?
  • Is the reward system so convoluted that I will struggle to understand when I can use it? Seek simplicity for your own peace of mind.

Highest Value Options

  • Rewards without expiration dates for points
  • Those with lower spending limits to acquire rewards

Now I’ve Got It, What Do I Do With It? 

Now that you have chosen the best card for your situation, use it to improve that situation. 

If it’s for credit building, reach a point where your score is high enough for you to move up to a higher level card with a better balance and maybe even rewards.

If it’s low-interest you want, use it to pay off the debts you’re struggling with and buy yourself the time you need without %APR to eliminate your debts, so you can move on to a rewards card.

Finally, if you have a rewards card, find ways to maximize its value to save the most money or acquire the most benefits by streamlining your cards to activities that you do the most. 

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