How to Choose the Right Credit Card
Getting a credit card is a great way to begin building credit. However, it’s hard to know which card is right for you. There are many options out there, all advertising enticing rewards programs or attractive introductory rates.NerdWallet explained the first step in choosing the right credit card is identifying the main reason you want a new card. Are you trying to build or repair your credit score? A student credit card or unsecured card is best for you. If you’re looking for a card that won’t charge you a lot in interest, choose one with a low APR or an introductory 0 percent rate. If you’re hoping to earn some rewards with your card, you might look into the best programs out there.
Once you identify your credit card goal, you’ll want to check your credit score. You can do this through any of the three credit reporting bureaus: Experian, Equifax or TransUnion. You are entitled to a free report from each of these organizations every year. The higher your score, the better a card you’ll qualify for. If you find that you have a credit score that is below 650 or 700, you might want to opt for a card to help you build some credit. An excellent score is considered one that is 760 and above, according to the Simple Dollar.
“Identify the main reason you want a new card.”
Now that you know what your score is and what your goals are, you can begin comparing options.
Best cards for building credit
If you’re looking to improve or begin building your credit, you’ll want to find a card that is easy to manage. Credit.com explained that getting a card from the financial institution you already have a checking or savings account with is a good idea because paying your bill will be as easy as transferring funds between accounts. Other qualities to look for include:
- Low interest rates
- Late payment forgiveness
- No or low penalty interest rates
NerdWallet listed some ideal cards for people building or rebuilding credit, as well as students. Each of these cards have no annual fee, which is helpful when trying to save money:
- Discover It Secured Card
- Capital One Secured MasterCard
- Citi Secured MasterCard
- Citi ThankYou Preferred Card for College Students
Best cards for saving money
When choosing a card with the hopes of paying low fees, it’s important to pay close attention to interest rates. Some cards have introductory interest rates of 0 percent, but it’s important to note when this period ends. Many people overlook this detail and wind up with a shockingly high bill the following month. Some excellent cards with 0 percent introductory rates include:
- Chase Slate – 15 months of 0 percent APR
- Chase Freedom Unlimited – 15 months of 0 percent APR
- BankAmericard Credit Card – 18 billing cycles of 0 percent APR
Once these promotional periods end, their interest rates will jump to:
- 13.24 percent to 23.24 percent for Chase Slate
- 14.24 percent to 23.24 percent for Chase Freedom Unlimited
- 11.24 percent to 21.24 percent for BankAmericard Credit Card
If you don’t want to risk forgetting about a higher interest rate, you can seek out a card with a lower one to begin with but no introductory rate. NerdWallet suggests the Barclaycard Ring MasterCard for its 8.25 percent variable interest rate.
Best rewards cards
When choosing a good rewards card, the first thing you’ll need to decide is what form you want your rewards to come in. Some people like cash back, while others like miles or points. Forbes contributor Nick Clements pointed out that points or miles cards can be very lucrative, but it takes a good amount of strategy for you to reap the benefits. Clements also advised that if you’re getting anything less than 2 percent back, it’s time to look for a new card.
According to NerdWallet, two of the best rewards cards include:
- Chase Sapphire Preferred Card – You’ll get a $625 signing bonus for travel
- Discover It Cashback Match – You can get up to 5 percent back in specific categories, which change periodically. Plus, at the end of the year, Discover will tally up all that you earned in cashback and double it.
Choosing a card can be tricky because there really are many options out there. The key is to narrow down your goals and compare the cards to find one that makes sense for you.