Here's all the
things you need to consider... Today's
consumers are presented with a wide array of credit card choices - credit cards
with low APR's, introductory rates, cash back and other rewards, gold cards, platinum
cards - the list goes one and on! So, how do you choose the right credit card
when you have so many options to choose from? Here's some factors to consider
when choosing a credit card: 1.) Your
Credit History: Your credit history
is the most important factor in determining whether or not you will be approved
for a credit card. If you have excellent credit, it's likely you'll be approved
for any credit card you choose - feel free to apply for any credit card on our
website! But if your credit is less than perfect - or you have poor or no credit
- you'll have less options to choose from when picking a card. Platinum,
Titanium, Gold, or Classic? In
the past, Platinum and Titanium cards were normally reserved for
individuals with excellent credit. But in today's credit card market, "platinum"
status doesn't mean much. Almost anyone can get approved for a platinum card,
but generally, people with lower credit scores are more likely to be approved
for a Gold or Classic card. With increasing levels of status, cardholders
receive lower rates, hight limits and more benefits.
If
You Have Bad Credit... Unsecured
credit cards are "traditional" forms of credit. Your interest rate and credit
line are based soley upon your credit history. Although most unsecured credit
cards are out of reach for people with poor or no credit, many issuers offer unsecured
cards designed specifically for people with less than perfect credit. While they
tend to have higher rates and additional fees when compared to standard "unsecured
credit cards", these cards do not require security deposits and may help improve
your credit score over time. Secured
credit cards, on the other hand, require a security deposit for approval.
These credit cards are available to almost any individual regardless of credit
history because the security deposit guarantees your credit line. For example,
if you deposit $300, you'll receive a credit line of $300. This may not seem like
a true "credit line", but the charges you make with a secured credit card will
be reported to the three major credit bureaus; and timely payments will show a
positive track record on your credit report. You can use this to your advantage
to build, repair or improve your credit history! Prepaid
credit cards are available to almost anyone. They operate on a 'pay as you
go' basis and offer the safety and convenience of plastic - without the hassle
of carrying cash. Although some prepaid offers allow you to build / improve your
credit score, not all report your activity to the credit bureaus. Make sure you
check first if this is your goal...
2.)
Your Spending Habits: Consider
how your will use your new credit card. Will you pay off the outstanding balance
in full each month, or will you carry a balance? If
you carry a balance, you'll probably be more interested in a low
apr credit card. On the other hand, if you always pay your monthly bills in
full, your best choice might be a credit card with no annual fee and a longer
grace period. Or, consider a reward credit card. Even
though it might have a higher interest rate, this will have little effect if you
don't carry a balance. Do you want to transfer existing
credit card balances? 0% interest credit cards
are a great option to save lots of money. You can transfer your existing credit
card debt and pay no interest for a specified time frame - sometimes 12 months
or more. 3.) Your Specific Interests:
Do you do significant amounts of traveling,
use a specific brand/service, or shop at a specific chain of retail stores? Many
credit card issuers will allow you to earn rewards for your devoted service. Travelers:
If you are a frequent traveler, many companies allow
you to earn bonuses to benefit you. Airline credit cards
allow you to earn free air travel with every purchase. Other offers allow you
to earn free gas, or earn credit towards automobile
purchases. Shoppers: If you are a frequent
shopper, or prefer a certain retail store or brand of products, many companies
allow you to earn cash rebates when you make
purchases. These offers allow individuals to earn cash back on all purchases made.
In some cases, they offer increased incentives for purchases on certain products
or brands.
Before selecting a
card, be sure you know which credit terms and conditions apply to the account.
Consider the annual fee, finance charges, balance computation method, and whether
or not there is a grace period for purchases. See our article about Important
Credit Card Terms for more information on these and other important credit
card disclosures.
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