If you have ever looked into applying for a credit card, you know first hand how many different types there are. Some credit cards offer cash back, some offer points, while others offer travel benefits. Some retailers even offer store credit cards. Many credit card companies offer special services or deals to sign up with them. It is important to do your research on the card that you are looking to apply for.
Identifying Your Needs
It is important to think about the features of the credit cards and how they will mesh with your financial goals. If your credit needs some improvement, some credit cards can help improve your score. There are also credit cards that offer low-interest rates. Although I always recommend you pay off your card in full each month, sometimes that may not be possible. In which case, a low-interest credit card might be best for you. If travelling is something you do often, a credit card that has travel benefits might be worth researching further. It is always important that you fully research a card before applying for it. Three things you should always keep in mind when choosing a credit card are interest rate, credit limit and any penalties that may occur.
Interest Rate – If there is a possibility you will ever carry a balance on your card (not pay it off in full every month), it is best to look for a low-interest card.
Credit Limit – You should have a reason for wanting a credit card. Will this card be used for emergencies? Or will you be using it for daily purchases? When applying, make sure you request a limit that reflects how you’ll be using your credit card.
Penalties – If you plan on paying off your card in full every month, this isn’t something to stress about. However, if you will be carrying a balance, make sure you know the financial institution’s penalties for late fees, or other fees associated with carrying a balance.
Access the Benefits
Once you have determined your needs with your credit card, it’s time to look at the benefits. With so many credit cards available to us, it is important to look at the benefits of choosing one over the other.
If you’re looking for rewards, look into credit cards that offer the highest rewards for items you are already purchasing. You should make sure these are rewards you really want. For example, if you don’t like to travel, an Avion credit card probably isn’t what you’re truly looking for.
If you’re tracking your credit score, you may want to consider a credit card that offers a monthly credit score update for free.
There are several other credit cards that have rewards for things such as groceries, gas, or retail items. You may also find cards that offer rewards for spending, such as gift cards, discounts, or cashback.
Applying for the Card with the Best Value
Once you have narrowed down your choice of credit cards to a few that meet your needs, it’s time to make a decision. It is important that you look closely at each card and decide which one will offer you the best value and meet your financial needs and goals.