How Do You Know Which Credit Card to Get?


Credit cards come with so many different options, how do you know which credit card is best for you?

Many offer rewards programs where you get free stuff or cash back. Others you can find representatives at local events where they give you a free tote bag or towel to get you to sign up for their credit card. Even at the mall a cashier can get you signed up for a department store credit card in just minutes. Do you give in to the pressure of opening a credit card on the spot? Or do you do your research ahead of time?

Choosing the right credit card

It’s very easy to be persuaded to apply for a credit card, especially at a department store where they give you instant 10% or 20% off your purchase.  You do the mental math and saving $20 off a $100 purchase is a great deal. But, do you get the chance to read the fine print at the store? Such as the 27% interest rate that they’re hiding when they throw the amount you are immediately saving on the spot?   Here are some tips that can help you make smart decisions:

  1. Think about the type of credit card you want.  Is it for emergencies or do you have something in mind that you want to purchase? Most banks offer credit cards and if it’s a Visa or MasterCard you can use it anywhere you see their logo. Store credit cards can only be used at that specific store.
  2. Interest rate matters. Ask what the interest rate is because if it’s too high, it can quickly add up. You don’t want to get a credit card with a 26% interest rate when you could be getting a lower interest rate somewhere else.
  3. Check your credit score. There are three credit bureaus where you can access your credit report for free. Your credit score affects the type of interest rate and the amount of credit you get when you apply for a credit card.
  4. Do your research online. There are websites like,, that allow you to search a variety of credit cards at once. You can also find reviews and see what people like about them.
  5. Don’t pay additional fees. There are some credit cards that charge an annual fee. Make sure you choose a credit card with no annual fee or fees that accumulate when you don’t use it.

Specific types of credit cards

Rewards credit cards: Offer rewards of specific purchases. There are three types of rewards:cashback, points, and travel. These offer you points towards cash you get back, gifts, and even free travel vouchers.

Promotional interest rate credit cards: These cards offer you a promotional interest rate for a specific amount of time, many up to a year. They can offer 0% interest on purchases for a whole year.

Specialty credit cards: If you own a business or you’re an executive, you can get this credit card with higher credit limits. Students also can get specialty cards offering credit to those who have no credit and are barely starting out.

Store credit cards: The cashier at a department store can ask you if you’d like to apply and in a matter or minutes you could be pre-approved and even save a percentage off your total purchase. You can also apply online ahead of time.

Make smart decisions with your new credit card

Before you jump into getting a new credit card, think about the type of purchases you want to make. Just because you have a credit card with a $5,000 credit line does not mean that you have to max it out. Think about the types of purchases you want to make with your credit card. Do you want to purchase a cup of coffee for $2 with your credit card? Remember that every time you don’t pay off the balance, the interest rate keeps adding up.  Think about how much your monthly payment will be each month and how much you could afford to pay.

How can your credit card ruin your credit score?

A credit card is great to have in case of emergencies. You always have it in your wallet, so it’s very easy to whip it out and go on a shopping spree. One of the biggest mistakes, especially among young people is putting too much on your credit card. There’s nothing wrong with paying everything with your credit card as long as you pay a hefty sum each month.  Here are some common mistakes that can affect or lower your credit score:

  • You spend too much and you go over your credit limit. It is important to make at least the minimum payment every month. Depending on your interest rate, the wise thing to do is to pay as much as you can afford every month to pay off the balance faster. If you pay on time that also helps you build a good credit history.
  • You make late payments. Every time you pay even a day late, there’s a penalty. Most credit cards can charge you anywhere between $25 to $40 fee when you default on your payment. Then, if you don’t pay it right away and take longer than 30 days to pay a minimum payment your credit card company will report you to the credit bureaus, which will affect your credit score. Some credit companies will even increase their promotional interest rates if you’re late on your payments.
  • You open too many credit cards. Every time you open a credit card that increases your credit line because the more credit cards you open the larger your credit line. The only bad part is keeping up. Losing track of your credit cards is very easy to do and when you spend too much on credit cards that can add up at the end of the month when it’s time to pay.

Getting a credit card is not hard to do, but it’s important that you make wise decisions when doing so. Having a credit card in your pocket can help your credit score, but it’s important to be intelligent about spending.


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