Credit card companies make every effort to convince you that their card is exactly what you need. How could you have possibly made it this far in life without their card? With bold letters on shiny plastic, there is certainly an initial appeal. Before requesting a card with your name on it, however, you should closely consider whether or not their offer is relevant to your lifestyle. When searching for the right credit card, there are a few things to keep in mind.
Choosing a credit card is similar to any other purchase. You want the lowest price possible with the most rewards and no hidden costs. Companies with unnecessary annual fees should be marked off your list first, followed by those with high interest rates. There are enough opportunities available with no annual fees and low interest rates that finding a reasonable offer should not be a problem.
Once you’ve eliminated the more expensive choices in your credit card search, you should begin to organize your options based on your individual needs. If you are a student with no credit history, a student credit card is a great way to get started. It is often easier to get approved for a student credit card than for a traditional card that requires extensive credit history checks and a good credit score. Secured credit cards are available to those with poor ratings who are longing to repair their credit. Those with good credit have access to a multitude of offers and rewards.
Rewards come in several forms. For the commuter or traveler, there are some cards that offer gas rewards, while others offer rewards that cater to frequent flyers. Additionally, some credit cards offer cash back on groceries as well as points that can be earned and applied to different prizes. However, keep in mind that these are only true benefits if you are paying in full each month.
Before choosing a credit card, be completely certain that you understand the terms. You may be offered zero percent APR at first, but how many months is that going to last? Your initial interest rate may be around 15 percent, but what will your interest rate be if you hold a balance or miss a payment? Read the entire disclosure agreement (even the tiny print).
Choosing the right credit card is easier when you look beyond the elaborate advertisements of credit card companies. A credit card is an essential financial tool when used correctly. With the right planning, you can build your credit history, improve your score and gain rewards through the use of your credit card.