4 Key Considerations For Finding The Perfect Credit Card For You

Although credit cards have a bad rap, none of us can dispute that a well-managed and used credit card has many advantages.

For example, as noted in an Investopedia article, responsible credit card use can allow you to take advantage of things like bonuses, reward points, and cashback schemes. When used responsibly, you can also use your credit card to improve your credit score.

However, as you may know, not all credit cards have the benefits mentioned above. That’s why you should carefully research, compare, and choose a credit card that suits your needs.

Although there are many considerations to keep in mind when choosing a perfect-for-you credit card, below are four important ones: 

1. Your credit score and history

This is a key consideration, and here is why:

Your financial profile, which includes your credit score and history, influences how much credit you can get and which credit card is ideal or the right fit for you.

Fundamentally, the better your credit score or creditworthiness, the more and better credit card offers you’re likely to get. For example, if you have an excellent credit score (670+), you can be eligible for low-interest, better rewards credit cards.

As good practice, take stock of your credit score before applying for a credit card to ensure you don’t apply for one you can’t get approved for because it might trigger a hard credit card report inquiry, something you don’t want because it lowers your score.

2. Interest rate/APR

No matter how great they are, all credit cards have an average interest rate or annual percentage rate (APR). This APR determines how much interest you ought to pay on all carried credit balances.

As Suze Orman, a #1 bestselling personal finance author and serial entrepreneur, notes, “the interest rate is the most important consideration when choosing a credit card.”

As Dave Ramsey often notes, it’s best to go for whichever credit card available to you has the lowest interest rate. However, depending on how you intend to use your credit card, remember this primary principle: higher interest rates mean higher payments on your balance.

3. Your financial goals

Although it’s one of the least talked about aspects of getting a credit card, your financial goals are a significant consideration to keep in mind when choosing a credit card that’s right for you.

For example, suppose your goal is to manage your money better, get out of debt, save, and invest more. In that case, a credit card offering an introductory 0% APR could be the best for you, especially if you have some existing credit card debt that you’d like to consolidate under a balance transfer credit card.

Similarly, let’s say your goal is to take advantage of the many credit card rewards like cash back, concierge services, travel or mile points, and other exclusive discounts and rewards. In that case, compare the credit cards available to you and the rewards they offer, then choose one that fits you best.

4. Credit card fees

Besides the interest (APR) charged on your balance, most credit cards also have other fees that often vary from one credit card provider to the other.

For example, some credit cards have attached annual fees, balance transfer fees, late fees, foreign transaction fees, card replacement fees, over-limit fees, finance charges, and other common credit card fees.

The credit card fees attached to each available credit card are a key consideration because, as Ramit Sethi, an entrepreneur and personal finance advisor, notes, “fees can eat into earned rewards.”

Doing a credit card comparison is the best, fastest, and easiest way to compare credit cards and credit card fees to ensure that the credit card fees you end up paying do not eat too much into your rewards to the point where it becomes costly to have that credit card.

Conclusion

Because there are so many options, choosing the perfect credit card for you may seem daunting, but if you know what to pay attention to, the process should be easier.

The four key considerations we have discussed are not the only ones, but they’re a good starting point that should make it easier to narrow your credit card choices to a few contenders that are just right for you.