So you’ve gone through your list of important credit card priorities, types of cards, and features over and over. You know you want the best card for your financial situation, but don’t know which factors should make or break your choices. At Credit Card Advisor, we understand that people have credit cards for different reasons, so we’ve compiled this list of tips to help you understand and weigh your options. Go through the list, look for the factors that matter most to you and find a card that’s best for your situation.
APRs vs. Annual Fees
Unless you have really excellent credit, it can be hard to find a card with a low APR and no annual fee. Before choosing your card, evaluate which of these factors is best for your financial situation.
If you have existing debt, or if you make a lot of large purchases and pay your card off slowly, you’ll probably save more on a low APR. Try to roughly calculate the general amount of money you have on a card at any given time. Then look to see how much of a difference varied APR rates will make in your monthly payments. You’ll see that there is a big difference between 8 and 20 percent. Most cards with annual fees charge about $50. If a lower APR can save you more than the card’s annual fee, it’s the smarter option.
However, if you pay your card on time, or only rely on credit cards for emergencies, you can save more in the long run with a card that has a higher APR but doesn’t carry annual fees.
Spending habits aside, everyone can benefit from credit card rewards. The different programs can be somewhat confusing, but with some research, you should understand how to take advantage of credit card offerings. Again, it all comes down to fining a card that caters to your personal financial situation.
If you don’t charge much money on your credit cards, don’t bother with rewards programs that require you to earn points as you spend. Instead, focus on promotions and introductory offers. Many cards give customers immediate rewards, and by looking at the way rewards are distributed, you can get rewards without changing your spending habits. Also, promotion cards offer new clients everything from instant rebates to merchandise. Just for signing up with some cards, you can get flight points and rebates.
However, if you have large sums going through your cards, you should look for the cards that give rewards based on how much you spend. Often, these cards don’t have large, give-away promotions, but you’ll earn more in the long run. Think about the rewards that matter most to you, and what you’d spend your money on, and find a card that offers rewards that are based on these factors.
Individualize Your Card
The most important step to finding a credit card that caters to your needs is making sure it’s individualized and tailored to your needs. Think hard about what kind of consumer you are, and to what credit categories your spending habits and financial situation belong.
Primary factors to keep in mind are where and how you shop. If you find yourself returning to the same grocery stores, gas stations or even clothing stores, find a credit card that provides perks based on those spending patterns. Sometimes, just thinking about your shopping tendencies can improve the benefits a credit card already offers. For example, if you already have air miles card, think about what airline you most often fly, if you actually travel on blackout dates, and if you need rental cards and hotels when you travel. Just by considering your own habits, and realizing what you do and don’t need, you’ll be able to evaluate benefits with a more critical eye, and realize what cards will best for you.
Also, consider your savings goals. Credit cards can help you save for everything from college tuition, to future vacations. Think about your long-term goal for your financial future, and apply for a card that can fulfill those needs.
By really establishing what features you want from your credit card, you can save yourself time and money. The process of shopping for credit cards becomes less tedious and you’ll know what offerings to look for. Just by doing a little bit of research and evaluating how different features apply to your credit situation, you can find the right credit card!