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How to choose the right credit card for me

A credit card allows you to pay goods and services using borrowed money according to a given credit limit.

There are so many types of credit cards with different features and rewards. It’s important to explore the different options to find the one that best matches your needs.

There isn't one best card, each has its advantages and disadvantages, for example if you want a card associated with a category then you’re probably interested in a card associated with your spending habits and with the respective reward programs.

What you should do is compile a list of cards and their features, fees and benefits and select according to the usage you’re expecting to give to it.

With so many cards to choose from, you'll find that some cards earn the same flat rate for purchases but earn extra in the bonus category. You'll find a lot of rewards credit cards that you make money on, and you'll just forget the benefits until you carry the card. Another advantage is that you get rewards that are like getting a gift card or even cash payment on your purchases for every credit card you use. Some cards allow you to transfer points to other loyalty programs to earn points when you redeem them for vouchers.

Credit card reward programs are different, and it is best to read individual credit card reviews to understand their programs. To understand what each card counts, you can see the methodology at the bottom of this page. 

People don't often start using credit cards to get into debt, but that's starting to happen. If you have bad credit cards, you still have the option to get the benefits of a credit card, and if you get a secured card, you do not have to pay annual fees. People with poor credit histories often seek secured credit cards that require a cash deposit and can afford a line of credit that matches their credit. High-quality secured credit cards can be converted from unsecured cards to secured cards in less than a year, meaning that you can get the deposit back as long as you allow enough time between payments.

If your credit card company does not clearly specify what you need to do to get approval, you may not improve your chances, even if you might have a good score. Some credit cards are rejected by issuers because they believe you have applied for too many new cards in the recent past or that your debt is too high relative to your income. Look out for cards that offer pre-qualification and come with soft credit requirements, such as those that have low interest rates, low fees and / or no fees at all.

Almost every place that takes a credit card takes Visa or Mastercard, and consumers are wondering if there is any difference at all. You might want to look at Visa and Mastercards in the US, because American Express and Discover Cards may not be widely accepted abroad.

Find out what type of credit card is right for your situation and use it to achieve your financial goals. We will also talk about how your card options can affect you, describe the various credit cards and plans available to you, and discuss how to prevent credit card fraud both online and in the real world.

What about cards for students

There are some excellent benefits that can be found in a good student card. If your credit is not the best, but not too bad, it is a solid option, as we have seen with many of the best credit cards available to students in the United States.

How to apply for a credit card

To apply for a card you need to contact the issuer entity and initiate a card application.

In the process of applying to a credit card you will probably be required to state your name, address, date of birth and id card number.

This data is required by finantial institutions mainly to help the government in tracking the funding of criminal activities like money laundering and terrorism.

Credit card approval depends on more than just your credit card, and it is easy to be forgotten once you have been approved. Credit card issuers do not only consider the credit score when evaluating their application, but some of the exhibitors are not transparent about what these factors are. Many issuers offer credit cards to people with high outstanding balances, high credit scores or high debt-to-income ratios. The better your credit rating, the more likely you are to qualify and the higher the interest rate.

Premium credit cards, which have annual fees of $450 or more, tend to offer cushy perks. The more you earn, the higher the interest rate, but these are only available to those with good or outstanding credit.

Credit card vs debit card

With credit cards you can aggregate all your purchases and only pay for them at the end of the month. Additionally you can only pay part of that amount and use the credit line for the remainder, paying the respective fees.

With debit cards you pay as you buy directly from your bank account, but on the other hand you don’t have to pay interest or fees.

Credit card advantages

With a credit card you can purchase anything you need even when you don’t have the necessary money in your bank account.

Credit card may help you in an emergency giving you time to obtain funds before having to make the payment.

It’s easier to use your credit card to pay for mid priced items like a $1000 TV that to pay the full amount from your pockets.

When you use a credit card to make a purchase you automatically have rights, and also responsibilities under the law.  

Credit card risks and disadvantages

Using credit to make payments leaves a accumulating debt that may not be easy to pay by the end of the month.

If your debt has accumulated to a point where you cannot pay it, it may be necessary to file for bankruptcy.

Filing a bankruptcy is almost always considered a last resort, as credit card debt is unsecured it could be wiped in a bankruptcy.

Credit card security

Using a secured or unsecured credit card works the same way, merchants may even now know in which status your card is.

What is credit score

The credit score is numerical value that represents a person’s creditworthiness.

Although institutions can use different credit scoring methods they usually use recommended credit scores so clients have an idea of which cards they can qualify for.

For instance top tier cards usually require scores of good Good to Excellent, which in the FICO scoring is 670 to 850.

If you start improving your below-average credit rating today, your chances of qualifying for a top credit card will increase significantly. If you use your card responsibly over time, you build up your credit and can apply for better cards. Since secured cards report all payments and purchase activity to the major credit bureaus, cardholders who use their cards responsibly can extend credit lines on their cards and switch to normal credit cards at a lower interest rate than their unsecured counterparts.

What are the credit card fees

The total number of fees also has a significant impact on your credit card settlement, as does the total number of these fees, including whether the card has foreign transaction fees and whether it waives the first late payment fee. Monthly bonus points are awarded to credit cards and accounts based on the total amount that the signatories spend each month linked to their accounts. These fees do not affect your credit rating, but rather the total credit amount of a card and the number of points available.

What is a credit card APR

APR (annual percentage rate) is the credit card interest rate.

In most cards this rate can be avoided if you pay the due amount by the end of the month. But if you carry unpaid balance then you have to pay the APR.

Most cards don’t require the balance to be paid in full each month but the recommended and most prudent practice is to pay all amounts due each month so you don’t have to pay interest charges and accumulate debt.

The average credit card APR is around 19%, but you can save money by carrying a credit card balance with interest and moving it to a card with a 0% APR. Some cashback cards come with an intro APR that allows you to earn rewards if you pay on time and get them back over time. 

Most top cards have an APR of 0% on initial periods that can last over a year.

How much credit card holders spend

On average cardholders spend on average:

  • Visa $3,990
  • MasterCard $3,178
  • Discover: $1,805

In the fourth quarter of 2015 credit card debt passed the $900 billion, and the average household was owing $7,813. 

 

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