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4 Easy Steps How to Pick the Best Credit Card for You

You will find the best match for your spending patterns and priorities if you understand your choices and ask the right questions.

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Finding the right credit card is a science and an art. In all categories — or for all citizens — no one credit card is better than the others. You will find the card that's perfect for your spending habits and credit condition by understanding your choices and asking the right questions.

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To find the highest, follow these four measures.

1. Check your credit

Check your credit score to see what credit card deals you may be eligible for. The higher your credit score, the more likely you are to be eligible for cards with better benefits. You can check your score in a variety of ways, including:
  • Credit ratings are available for free.
  • Many credit card companies provide free FICO scores to their customers.
  • Experian, Equifax, and TransUnion, the three big credit bureaus

Review your credit reports to see what's causing the problem if the number isn't what you predicted. If possible, you can then start searching for ways to change it, such as improving your spending habits or disputing a report mistake. Every 12 months, you are entitled to one free copy of your credit report from each of the three major bureaus under federal law. AnnualCreditReport.com, a federally registered platform, offers free credit reports.

2. Identify which type of credit card you need

Credit cards are divided into three categories:
  • Credit cards that assist you in repairing or improving your credit when it is reduced or weakened.
  • Credit cards that help you save money on interest.
  • Cards that allow you to earn rewards.

The best card for you is one that has features tailored to your unique requirements. If you don't travel much, for example, the best travel card in the world won't help you much.

IF YOU WANT TO BUILD OR REBUILD CREDIT: STUDENT OR SECURED CREDIT CARD
Student credit cards are easier to apply for than other forms of credit cards because they are unsecured and designed for college students who are new to credit. Secured credit cards, which usually require a $200 or more security deposit, are also available. When the account is upgraded or closed in good faith, the deposit is returned to you.

IF YOU WANT TO SAVE ON INTEREST: LOW-INTEREST, 0% APR OR BALANCE TRANSFER CARD
If you choose to use your credit card for emergencies or if you have intermittent income and carry a balance from time to time, a card with an introductory 0% APR and continuing low interest rate may be a good fit for you. A balance transfer deal may be able to help you pay off a high-interest loan without paying any interest. Bear in mind that if you have mediocre or bad credit, these deals can be more difficult to come by.

IF YOU WANT TO EARN REWARDS: REWARDS, TRAVEL OR CASH BACK
If you pay off your balance in full every month and never charge interest, a rewards credit card is a good fit for you. These cards have higher APRs, but they come with bigger sign-up incentives and reward you with points, miles, or cash back for every dollar you spend.

3. Narrow your choices by asking the right questions

Search for the type of credit card you want using the credit card comparison app, filtering results based on your credit score and monthly spending. Consider the following questions as you browse the top picks.

FOR STUDENT AND SECURED CARDS:
  • Can this card assist me in improving my credit? Look for a card that notifies the three major credit bureaus of your credit card payments. This is something that many secured cards don't do.
  • What is the cost of opening a bank account, including the annual fee? The benefits on these cards aren't usually good enough to justify the annual charge.
  • Unless you have really bad credit, you should be able to escape this price. While your credit limit can be directly tied to how much of a deposit you make, the lower the security deposit, the better for secured cards.
  • Is it possible to upgrade to a better card later? Choose a card that will allow you to create credit and eventually upgrade to a card with better terms. This makes it possible to keep your card open for longer periods of time, and the average age of your accounts over time.

FOR LOW-INTEREST, 0% APR OR BALANCE TRANSFER CARDS:
  • What is the duration of the 0% APR period, as well as the ongoing interest APR? Look for a card that helps you to pay off your debt without incurring interest. Consider a credit card with a low ongoing APR if you intend on keeping a balance for many years.
  • What is the balance transfer policy for the card? Look up a card's balance transfer fees if you're making a balance transfer. Find out what forms of debt you can transfer and if there is a maximum amount you can transfer. It's worth noting that a card's balance transfer APR can vary from the purchase APR.
  • Is there a loyalty program with the card? If you only need a few months of 0% APR — maybe as a substitute for a sign-up bonus — you may be able to find a card that also offers lucrative ongoing rewards.

FOR REWARDS, TRAVEL OR CASH-BACK CARDS:
  • What am I going to do with my money? Choose a card that offers the best incentives in the categories where you spend the most. If you're a frequent shopper, consider getting a card with an annual fee if the benefits you'll get will cover the cost. If you choose to use the card outside of the United States, search for one that has no international transaction fees and supports chip-and-PIN technology rather than the chip-and-signature technology that is popular in the United States. This also applies to other forms of cards.
  • How difficult is it to use this credit card? Consider a card with flat-rate cash-back rewards if you don't want to deal with restricted award seat selection, spending limits, revolving bonus rewards, or loyalty tiers.

4. Apply for the card that offers you the highest overall value

The easy part is narrowing your options, but choosing between two or three identical cards can be challenging. After Step 3, if you've already identified a definite winner, stick with it. If not, a tiebreaker round will be held.

Keep an eye out for discrepancies. If all other factors are equivalent, the following characteristics can distinguish a card:

FOR STUDENT AND SECURED CARDS:
  • The credit limit is immediately raised. Certain credit cards allow you to raise your credit limit after a string of on-time payments.
  • For your deposit, you will be paid interest. Your security deposit can be placed in an interest-earning CD with some secured cards. You will raise a small amount of money this way.

FOR LOW-INTEREST, 0% APR OR BALANCE TRANSFER CARDS:
  • Plan to pay off your debts. Some creditors allow you to build your own debt repayment plan through an online portal, which can be a useful tool if you're drowning in debt.
  • There are no late fees or APR penalties. These fees are waived on certain credit cards. This might be useful if you fall behind on your payments.

FOR REWARDS, TRAVEL OR CASH-BACK CARDS:
  • Spending requirements are reduced. The lower the minimum deposit required to apply for a sign-up bonus, the better.
  • The prizes have no time limit. You can use the incentives on certain cards as long as you hold the card open.
  • When choosing a passport, bear in mind that you should provide all income you have fair access to on the application, not just your personal income.

So you've figured out which credit card is the best. So, what's next?
It's important to choose the right credit card, but don't stop there. To get the most out of your card, use it correctly. If you're trying to create credit, make sure you pay your bills on time and don't use up any of your available credit. If you got a 0% APR offer, stick to your debt repayment plan. Use your card for daily transactions and pay your bill in full every month if you want to earn rewards. If you're trying to create credit, borrow money, or receive rewards, the credit card you select can help you meet your financial goals in the most cost-effective and productive way possible. Don't settle for anything less than the best.

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