Finding the finest credit card is a combination of art and science. As a result, no single credit card is superior to all others in all areas – or for all people.
However, by researching your options and asking the right questions, you may choose the card that is best suited to your spending patterns and credit condition. To find the best credit card for you, follow these four steps.
Examine your credit report
Check your credit score to see what credit card offers you might be eligible for. The higher your credit score, the more likely you will get approved for cards with superior benefits. You can check your score in a variety of methods, including:
1. NerdWallet provides free credit score access.
2. Many credit card companies provide free FICO scores to cardholders.
3. Credit ratings are sold by the three major credit bureaus (Experian, Equifax, and TransUnion).
If the result isn’t what you expected, go into your credit reports to determine what’s causing the issue. You can then begin to consider measures to improve it, such as adjusting your spending habits or challenging an error on your reports, if necessary. Every 12 months, you are entitled to one free copy of your credit report from each of the three major bureaus under federal law. In addition, AnnualCreditReport.com, a federally recognized website, offers free credit reports.
Determine the type of credit card you require.
Credit cards are classified into three types:
Cards that might assist you in improving your credit when it is limited or damaged.
Cards that let you save money on interest.
Cards that gain points.
The best card for you is one with features tailored to your unique need. If you don’t travel frequently, for example, the best travel card in the world won’t help you much.
If You Want To Build Or Rebuild Your Credit, Consider Using A Student Or Secured Credit Card.
Student credit cards, which are unsecured cards designed for college students who are new to credit, are easier to obtain than other forms of credit cards. Secured credit cards, which typically require a security deposit of $200 or more, are also available. When the account is upgraded or closed in good standing, your deposit is returned to you.
If You Want To Save Money On Interest, Consider Using A Low-Interest, 0% APR Card Or A Balance Transfer Card.
If you plan to use your credit card for emergencies or if you have an irregular income and carry a balance from time to time, a card with an introductory 0% APR and constant low-interest rate may be a suitable fit for you. In addition, a balance transfer offer may enable you to repay a high-interest debt interest-free. However, keep in mind that you may have difficulty finding these offers if you have average or low credit.
If You Want To Earn Reward Points, Travel, Or Cash Back
If you pay off your debt in full every month and never incur interest, a rewards credit card is an excellent fit for you. These cards often have higher APRs, but they also have larger sign-up bonuses and offer points, miles, or cashback on every dollar spent.
Asking the correct questions will help you narrow down your options.
Visit NerdWallet’s credit card comparison tool and search for the credit card you want, filtering results based on your credit score and monthly spending. Then, consider these questions as you look through the top options.
For Student and Secured Cards: Will this card assist me in establishing credit? Choose a card that records credit card payments to the three major credit bureaus. Unfortunately, many protected cards do not comply with this requirement.
What is the total cost of opening an account, including the annual fee? The benefits on these cards are typically insufficient to justify the annual cost. Unless you have extremely bad credit, you should be able to avoid this charge. The lesser the security deposit, the better with secured cards, yet your credit limit may be directly related to how much of a deposit you make.
Can I upgrade to a better card in the future? Choose a card that will allow you to accumulate credit and upgrade to a card with better terms. This makes it easier to keep your card active for longer periods, increasing the average age of your accounts in the long run.
Low-Interest, 0% APR, or Balance Transfer Cards:
What is the duration of the 0% APR term, and what is the ongoing interest APR? Look for a card that allows you adequate time to pay off your debt without incurring interest. Consider a credit card with a low ongoing APR if you want to carry debt for a long period.
What is the balance transfer policy of the card? If you’re considering a balance transfer, look into the costs associated with the card. Find out what categories of debt you can transfer and whether you can transfer a maximum amount. It is important to note that the balance transfer APR may differ from the purchase APR.