How to Choose the Right Credit Card for You in 4 Steps | The Ascent

Here’s how to choose a credit card in four steps:

  1. Pick the type of credit card you want.
  2. Figure out the most important features.
  3. Compare your credit card options.
  4. Apply for the credit card you want.

1. Pick the type of credit card you want

There are many different credit card types out there. A big part of how to choose the right credit card is understanding how credit cards work and which type of credit poster is the right fit. once you decide which character of card you ‘ll shop for, selecting a citation calling card is much faster and easier. A frequent traveler who wants to collect airline miles will obviously need a different type of calling card than a scholar who ‘s build credit for the first time. That ‘s why the first step in how to choose a credit card is to figure out your main reason for getting a batting order. When I ‘m looking for the best citation card for me, I start by asking myself what I need it for. You ‘ll likely find that you choose a citation circuit board for one of the keep up reasons.

Improve your credit score

If you want to know how to choose a credit card because you have a low credit score or no credit history so far, then recognition cards for badly recognition are a good put to start. many of these are secured credit cards, which you open by paying a deposit to the credit card company. If you ‘re in college, scholar credit rating cards are another option .

Earn rewards on purchases

Rewards citation cards are a popular answer when consumers ask themselves, “ What is the best credit rating calling card for me ? ” These cards allow you to earn rewards on your spend. If you want to earn cash rewards, you should look at cash back credit cards. For points you can redeem toward locomotion, check out travel rewards credit cards .

Pay off purchases over time without interest

If you have one or more expenses that will take you some time to pay back, 0 % intro APR credit cards are just what you need. These cards offer a 0 % intro APR ( annual share rate ) on purchases. If you ‘re wondering how to choose a credit poster with a 0 % presentation APR, front at the duration of the basic APR period. It can last for a class or longer, depending on the card you get. Once it ends, the APR will increase, so you should aim to pay off your broad libra by then .

Save money on credit card debt

Balance transfer credit cards help you pay less interest on your debt. Like 0 % presentation APR cards, these cards have 0 % presentation APR offers that apply to balance transfers alternatively of purchases. You can transfer your proportion from credit cards with high interest rates to a balance wheel transfer poster with a 0 % presentation APR. According to research by The Ascent, the average credit rating circuit board balance reached $ 5,897 in 2020. If you have that kind of debt, knowing how to choose a credit calling card with a libra transfer offer can score you adult savings. Use our balance transfer calculator to see how much you could save .

2. Figure out the most important features

The next step is choosing credit card features that matter most. This will depend on the type of credit card you ‘re getting. hera ‘s how to choose a credit wag with the features you need.

Credit cards for improving credit

If you want to use a credit card for bad credit, a batten wag, or a student poster to improve your credit, here ‘s what you should prioritize :

  • No annual fee: You don’t want to take on any extra costs while you’re working on your credit.
  • Payments reported to all three credit bureaus: The three consumer credit bureaus are Equifax, Experian, and TransUnion. All three produce credit reports which get used to calculate your credit score. To raise your credit score, you need a credit card company that reports your payments to each of them.
  • Free credit score monitoring: Many credit card companies include a free credit score tool that’s updated monthly. This is a simple way to see if your score is increasing.

With secured credit cards, besides look for cards that have the choice to graduate. Graduation is when the card issuer upgrades your secured card and refunds your deposit. This is authoritative because it means you can get your deposit rear without needing to cancel the calling card .

Rewards credit cards

possibly you ‘re concern in how to pick a credit tease that earns cash second or travel rewards. If you ‘re wondering how to choose a credit tease that earns rewards, here are the features to look at :

  • Rewards rate: The amount of rewards a card earns on purchases. Some cards earn a flat rate, such as 1.5%, on everything. Others earn extra in bonus categories, such as 3% on gas and 1% on everything else.
  • Sign-up bonus/welcome offer: A bonus available to new cardholders. You usually get the bonus for reaching a spending minimum. For example, a card could offer a $250 bonus for spending $1,000 in the first three months. Not all rewards cards have sign-up bonuses.
  • Annual fee: A yearly fee charged for the card. This can range from $0, in the case of no-annual-fee credit cards, to over $500. Part of how to choose the best credit card is weighing whether a card’s annual fee is worth it based on the perks it offers.

There are besides two early features to check out if you want to know how to choose a credit card for travel :

  • Ways to use travel rewards: You redeem travel rewards for travel purchases, but exactly how this works depends on the card. Make sure it will be easy to book the travel you want with whichever travel card you pick.
  • No foreign transaction fees: You don’t want extra charges when you use your card internationally. Most travel cards don’t have foreign transaction fees, but it’s still good to check.

0% intro APR credit cards

When it comes to how to choose a credit card with a 0 % presentation APR, pay attention to how long the 0% intro APR lasts. The presentation menstruation should be long enough to pay off the purchases you ‘ll make. If you ‘re not certain how farseeing you need, look for the longest 0 % presentation APR you can find. If multiple 0 % intro APR cards fit your needs, use sign-up bonuses and rewards as tiebreakers to decide which credit menu is best.

Balance transfer credit cards

The length of the 0% balance transfer offer is the main feature to look at. Ideally, you should get a balance transfer tease with a 0 % presentation APR that will final until you can pay off your debt. If that ‘s not potential, then you should choose the card with the longest 0 % balance wheel transfer APR. Balance transfer fees are besides crucial, specially if two cards are otherwise peer. If you ‘re stuck on how to select a credit card for balance transfers and one has a lower balance transfer fee, then that ‘s the clear choice. Watch the video recording below for more information on picking a credit card .

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