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Four Tips On How To Choose The Best Credit Card For You

With so many banks and credit cards now available, it can be quite confusing how to choose the best credit card for you. But did you know? Credit cards are as different and unique as the people who use them. There are credit cards that match people who fly frequently, shop at certain stores, and so on. You can narrow down the perfect credit card for you with these simple steps:

Step One: Know Your Credit Score

know your credit score Nothing can put a damper on your credit card search like getting denied. Credit cards have minimum credit requirements you need to meet before your application gets approved. Depending on where your credit falls in the spectrum, this can limit your choices. Your FICO credit score is made up of several factors. It ranges from 300 to 850. A good credit level is 650 and above. You can get your free FICO score once a year from Annual Credit Report.com and monitor it through Credit Karma. When you know your credit score, it’ll give you a good idea of the types of credit cards you can apply for.

See Also: 4 Ways to Start Building Great Credit

Step Two: Choose the Correct Card Type

There are several different types of credit cards available. You want to pick one that suits your lifestyle, so you get the most use out of it. Most credit cards fall into one of three broad categories:

Cards to Help Improve or Fix Your Credit

If you have poor credit or if you’ve never had a credit card before, you’ll start with this category. Secured cards are a popular choice to help rebuild your credit, and you can usually upgrade to a non-secured credit line after a year. You do pay a refundable deposit to open the card. Student cards are great for college students who are just starting to build their credit.

Cards to Save Money on Interest

If you plan on carrying a balance from month to month, you may want a card that saves you on interest. Try to find a card with a 0% APR introductory offer paired with a lower monthly interest rate. If you have a lot of debt, a balance transfer card can give you a small reprieve from interest while you pay down your balance.

Cards to Reward You for Using Them

If you plan to use your card on a regular basis and don’t carry a balance from month to month, a rewards credit card is a good choice. You typically have to have very good credit to get these cards. They offer perks like cash back or points that you can redeem. These rewards add up when you use your card.

Step Three: Ask Questions to Narrow Your Choices Down

Now that you know where your credit is and what the broad credit categories are, it’s time to ask yourself a few questions. They’ll help you narrow your choices down even more.

Secured or Student Cards

1. Does this card allow for upgrades?

2. What fees will I pay?

3. Does the card report to all three credit bureaus?

Low Interest, Balance Transfer, or 0% APR Cards

1. Are there ongoing rewards?

2. What’s the interest rate and how long is the 0% APR?

3. Is there a balance transfer policy?

Rewards Cards

1. How do I usually spend money?

2. How fast can I earn rewards?

Step Four: Choose Your Card

If you’ve matched a card to your lifestyle, congratulations. If not, here are a few final considerations that can help you get the most out of your card.

Secured or Student Cards

Low Interest, Balance Transfer, or 0% APR Cards

Rewards Cards

See Also: 9 Valuable Credit Card Perks

Choosing a new credit card is a science, and we’ve given you a a step-by-step guide on how to choose the best credit card. Use your new card responsibly, and you’ll be able to build your credit and enjoy the rewards.

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