How To- Choose the Right Credit Card

There are a lot of credit card options out there.

After deciding why you want to have a credit card (see “How To- Cash or Credit?” and “How To- Build Your Credit”), you will want to decide which credit card is best for you.

www.creditcards.com is a great resource for comparing credit cards. You want to find the credit card with the annual fee, annual percentage rate (APR), and rewards that work for you.

Some credit cards are only available to applicants who meet minimum credit score levels. These tend to have better rewards and some have higher annual fees. One of the best is the MasterCard Black Card, which has a $495 annual fee, but has rewards exceeding well beyond the annual fee and is most advantageous for frequent travelers. It requires a 740+ credit score.

Annual Fee

Generally speaking, you do not want an annual fee, especially if the card does not give you much in return. That said, you may find it is worth the annual fee if the card gives you something of greater value in return. For example, I pay $95 annually for my Marriott Premier Rewards VISA. In return, I get a free hotel night annually, good anywhere in the world with no blackout dates, and up to 10X points on my purchases. The points can be used for Marriott/SPG hotel stays, rental cars, flights, and numerous other experiences. I could have even used the points for tickets to the Super Bowl. Using this credit card, I was able to book a week’s worth of rooms for four people in France and only had to pay the parking fees. If you choose this credit card, I can get you 20,000 bonus points you use my referral code. Please contact me if you are interested. It does not cost you anything more to take advantage of this offer.

However, most of my credit cards have no fees and also have nice rewards, including cash back, 0% or low percent APRs for certain time periods or for minimum threshold purchases, 0% foreign transaction fees, and more.

Annual Percentage Rate (APR)

APRs can add up fast if you carry a balance. While you will generally pay off your balance each pay period for budgeted expenses, if you have an emergency and have not yet saved enough to cover the unplanned expense, you may find yourself having to carry a balance. Whenever possible, choose a credit card with a low APR. APRs can be up to 29.99%, which can easily cause you to pay more than double the cash price for an item, especially if you pay only the minimum balance each month.

APRs are often associated with your credit score so be sure to optimize your credit score to the best of your ability. See “How To- Build Your Credit” for more information on credit score optimization

Rewards

Most credit cards offer some kind of rewards program, whether cash back, points that can be redeemed, or APR promotions.

Once again, decide what rewards mean the most to you. If you really prefer a particular hotel chain, airline, store, or automotive brand, you can choose their specific credit card. If you are more interested in a category (ie: travel, cash back, general points, etc), you can choose one of those. www.creditcards.com will help you find the card that works best for you. There is no fee for this service and I am not affiliated in any way.