Published By Blog Breed
Credit cards offer an array of advantages such as enabling you for hassle-free mobile banking, online shopping, offering discounts and cashback, building credit history, and so on. However, choosing a credit card might be difficult because there are so many options at your disposal.
So, like a vast majority of individuals, if you are also wondering, “Which credit card is ideal for me?” we have you covered. Here is a step-by-step guide that will help you to cherry-pick the best credit card for yourself in a breeze:
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1. Get A Copy Of Your Credit Report
First and foremost, know your credit score. It is because your credit score can help you determine what kinds of credit card offers you might qualify for. Most financial institutions, including your bank, allow you free access to your credit score.
Besides, you may also turn to any of the three credit bureaus – TransUnion, Experian, and Equifax – to get a free copy of your credit report once every year. With a better credit score, you are more likely to get a credit card with generous sign-up bonuses, reward programs, and more.
While applying for a new credit card, you will be subjected to a hard credit inquiry by the issuer. Since hard inquiries have a negative impact on your score, we would suggest you avoid applying for many lines of credit within a short duration.
2. Narrow Down Your Credit Limit
Your credit limit determines how high your amount can rise before you are unable to make any further transactions. Your credit limits heavily depend on your relationship with the issuer, credit score, and credit history. As a general rule of thumb, you will not know your actual credit limit until your application is approved.
3. Be Clear About How You Intend To Use The Card
When selecting a credit card, it is critical to think about how credit card incentives connect with your actual spending habits. Credit cards offer rewards in categories such as grocery, dining, and travel. So if you happen to spend money on ordering food or eating out at restaurants, you should think about getting a credit card that awards extra points for dining purchases.
Depending on a particular credit card, you will be entitled to various fees. That being said, the following are some of the most common fees:
- Annual fee: Typically, credit cards charge you annual fees that range between $95 to $550. The annual fees for some prime credit cards may be waived if you sign up for the card during the first year of card ownership.
- Penalties: Having this information is necessary when applying for a credit card. Do not only spend time learning about the fines but also inquire about the fee the company charges if you do not pay your bill on time. Even one missed payment might account for a considerable increase in the interest rate.
- Balance transfer fee: If you currently own a credit card but are struggling to repay high-interest credit card debt, a balance transfer card may be a smart alternative for you. Fees for balance transfers normally range from 3% to 5% of the transferred amount.
4. Shop Around
Check out a few different credit card offers before making a final decision. It will ensure you get the best deal to meet your requirements. To be approved for the top rewards credit cards, you will need to have a good credit score. To boost your credit score, you can look for credit cards that are specifically meant to do so, such as secured credit cards.
As a pro tip, only apply for one credit card at a time. Trying to apply for several credit cards in a short period of time can harm your credit score. To evaluate if you have a decent chance of qualifying for a new credit card, certain credit card providers offer preapprovals.
Back in the day, people had limited choices as far as credit cards are concerned. But things have changed now. Financial institutions are introducing different types of credit cards to cater to the needs of the maximum public. If you feel overwhelmed with the number of credit card options, this guide will give you much-needed clarity. Lastly, be sure to read the credit card fine print before signing the dotted line.