How to Pick the Best Credit Card for You

With so many credit cards on the market, it can be hard to know which one is right for you. Many credit card issuers tout the rewards they offer, from free vacations to discounts on household goods and services. Those issuers may not be so forthcoming, however, when it comes to disclosing their interest rates, late fees and other charges. As the consumer, it is up to you to dig deep and find the card that offers the best bargain, not just the one that promises the best perks.

One of the most important things to consider when looking for a credit card is what type of user you are. If you use your credit cards strictly for convenience and always pay your bill in full, you do not have to worry about things like interest rates and late charges. Convenience users are free to choose their credit cards based on perks, points and cash back alone.

If you run a balance even once in awhile, your main consideration should be the interest rate. The amount of interest you would pay on even a small balance can be far more than any perks or rewards you would receive. If you are unsure what kind of credit card user you will be, you might want to consider a secured credit card at the beginning. Secured credit cards are tied to the amount  you have on deposit at a linked bank account, so you cannot overspend or run up high charges. Once you learn to use credit responsibly, you can move on to a traditional card.

If you are new to using credit cards, you might want to ask for a relatively low balance. Having too much credit available could tempt you to overspend, especially if you lack experience with credit cards. Tying the credit limit to the amount you can comfortably pay off each month can make managing your money easier and make credit card use less risky.

If you are one of the lucky few who always pays your credit card balance in full and on time, you have the world of credit card perks at your disposal. All you have to worry about is what kind of reward appeals to you most. If you love to travel, you can look for a reward card tied to your favorite airline. Many airlines even offer bonus miles, sometimes enough to earn a free ticket right off the bat. You can also choose general travel reward cards that let you earn miles and redeem them on nearly any airline.

If you love to eat out, look for credit cards that offer bonus points that can be redeemed for restaurant gift cards. As with airline mile cards, you may be able to find cards with bonus offers that give you free gift cards right away.

No matter which credit card perks are right for you, be sure you understand how the points or miles are earned. Some credit cards offer a straight percentage for every dollar you spend, while others offer bonus miles or extra points for using your card at grocery stores, gas stations, restaurants and other locations. Understanding the rules surrounding the perks you want can help you earn those rewards faster and make your credit card even more valuable.

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