How to Find the Perfect Credit Card

Using a credit card wisely is an excellent way to improve your credit score. However, finding the right credit card can be a bit complicated. All of the different terms, conditions, rewards and benefits are difficult to weed through, especially when you receive several credit card offers a day in the mail.

Search high and low

When gathering information about different credit cards, consider looking in several different places. In addition to the offers you receive in the mail, you may find credit card offers online and through your local bank. Financial magazines and professional organizations can also be sources for credit cards.

Check your credit before applying

When looking for a credit card, it can help to know what your credit score is. This way, you apply for the appropriate cards without wasting your time and facing multiple rejections. Credit card companies and other lenders offer the best terms and interest rates to borrowers who have good credit scores. Credit scores help the lender understand how high the risk is that you will default on your loan. A low credit score tells a lender that there is a high possibility that you will not pay back your obligation. A high score means that you are at low risk for default.

Credit scores are based on many financial factors, primarily the information found within your credit report. If you manage your debt wisely, you will have a high score. If you aren’t paying your bills on time or accumulating too much debt, your score will be lower. High scores mean that you are able to shop around for more competitive interest rates because more lenders want your business. If you have a low score, you will find that the interest rates you are offered will be higher.

Improve your credit rating to get a lower interest rate

It’s always a good idea to put your best foot forward when applying for a job, and the same holds true when you apply for new credit. The better credit rating you have, the more likely a credit card company is to offer you favorable terms, like low interest rates.

If your credit isn’t stellar, consider ways to improve it before applying for a credit card. Are you paying all of your bills on time each month? Are you able to pay off some debt? These things will help to raise your score.

Make sure not to inadvertently lower your score while shopping for new credit. Filling out a lot of applications for new credit cards in a short time period will hurt your score. Only apply for one at a time, and even then make sure it’s a card you really want and need. 

An option for those with poor credit or no credit

If your credit is really poor, or non-existent, you may find that you need to shop for a secured credit card as a first step towards repairing or building your credit. Consumers with less than perfect credit will often be limited in their credit card limits to just a few hundred dollars.

Different cards for different purposes

When looking for the right card you have to consider why you need the card in the first place. For example, if you are taking out your first credit card in order to build credit, a card with a low spending limit is often better than a card with very high or no spending limits.

Ask yourself these three questions:

1. Why am I looking for a card? If you are looking for a card with a lower interest rate than the one you currently have, you will need to pay special attention to the terms and fees regarding balance transfers. If you won’t be transferring any balances, a card with a low interest rate, but high balance transfer fees might not bother you at all.
2. What will I be purchasing? If you are looking for a credit card to manage your fuel spending, then a gas card is probably the best way to go. Business purchases can be specifically made to cards tailored for businesses. If you want a card for emergency use only, look for a card that doesn’t have any annual fees when there is no balance on the card.
3. How will I pay the card? Despite being advised to always pay off your card every month, that isn’t always possible. Will you make a one-time purchase that you will need to pay off little by little over time? Then look for the card with the lowest interest rate and no annual fees. If you will pay off your balance in full each month, there are cards that require you to do so in return for certain advantages or benefits.

When looking for a credit card, consider these things before you look to special rebates or bonus reward programs. These programs may be important to you when choosing a card, but you should really make sure that the rewards are worth any added costs you may have in gaining them.

Once you know what type of card you need, apply for one card and wait. Don’t send out thirty applications and hope to hit the jackpot – this will not look good on your credit report. To become a successful credit card borrower you must find the right card, manage it correctly, and then enjoy the benefits of having good credit.