Knowing which credit card to get can completely change the way you view and use credit. Some people don’t pay attention to little perks and incentives. When they’re in the market for a new credit card, they might complete an application with the first bank they find online, or complete a pre-approval offer that arrives in the mail. Credit cards may all work the same, but they have different terms, features and perks. A card that’s right for you may be completely wrong for your spouse, and vice versa.
Here are four tools for deciding which credit card to get.
1. Rejected for Other Types of Credit Cards
Being rejected for a credit card may come as a surprise. But if you have poor credit or no credit, rejections are common. Some banks are extremely strict and they only approve people with a demonstrated credit history. If you’re a first-time credit user, or have credit problems, getting approved for a major credit card may not be possible at this time. Yet, other options are available to you.
Given the situation, you need a guarantee-approval credit card . A secured credit card is the best option because credit scores are not a decisive factor. Banks that issue secured credit cards understand that the majority of applicants will be people who can’t qualify for other major bank cards. To qualify for a secured credit card, you must pay the required security deposit, and provide proof of income and employment.
2. Paying Off Balance Each Month vs. Carrying a Balance
When deciding which credit card to get, seriously consider whether you’re planning to pay your balance each month, or carry a balance from month-to-month. Identifying your payment habit can help you choose the best credit card. If you’re going to pay your full balance each month, the interest rate on your credit card doesn’t really matter. Most credit cards have a grace period, and if you pay your balance during this grace period, you avoid interest. But if you carry a balance every month, you need a credit card with a low interest rate.
3. How Much Do You Currently Owe?
Maybe you’re fed up with the rate on your current credit card and you need an alternative. If you currently have a balance on your credit card, applying for a credit card with a balance transfer option is an excellent way to save money. If eligible, you may qualify for a credit card with 0% interest on purchases and balance transfers for the first 12 months. Transfer your high-rate balance to a low-rate card and you can pay off your debts sooner.
4. Frequency of Credit Card Use
Using your credit card for everyday purchases is one way to track expenses, plus you don’t have to worry about cash. This method works best if you pay off your balance each month. In this case, you shouldn’t settle for a no-frills credit card. Let your credit work for you and apply for a rewards credit card. These types of credit cards are perfect for people who frequently use cards – earn points, miles and cashback for every dollar you spend.