What Kind Of Credit Card Should I Get?
If you're looking for a new credit card to serve a different purpose, or you're thinking about getting a credit card for the first time, you might feel confused about all the options on the market.
Our quick guide can help you determine which type of credit card will work best for you based on your preferences and credit history. Read on to answer the common question many people wonder – what kind of credit card should I get?
CREDIT CARD TYPES FOR DIFFERENT NEEDS AND WANTS
The credit card you choose should reflect your financial situation and how you plan to use your card. Some credit cards are only available to people with higher credit scores, while other cards can help you build credit. Some cards are for purchasing goods or services from certain brands.
You can use the examples below to start thinking about your lifestyle and what you want from your credit card.
YOU WANT TO PAY LOW INTEREST ON PURCHASES
A credit card lets you buy things now and pay for them later. Some people choose to pay off their balance each month, but many people choose to carry a balance and pay a little interest on their purchases.
If you plan to carry a balance on purchases, choose a credit card with a low, fixed annual percentage rate (APR) so more of your payment goes towards your purchases. Also, make sure there's no annual fee.
YOU WANT TO TRANSFER A HIGH-INTEREST BALANCE
It can be stressful juggling multiple credit cards with high balances and high interest rates. You might get by paying your minimum balance due, but your debt won't get any lower.
If this sounds like you, consider getting a low-interest card offering a 0% introductory APR and no balance fee. Then try to pay down as much of your debt as possible within that intro period.
YOU WANT TO GET CASH BACK
In return for a slightly higher interest rate, some credit cards offer a percentage of cash back on your purchases. You can use your credit card to make everyday purchases and then get cash deposited into your checking or savings account each month.
Just be sure to check which purchases qualify for cash back and any other conditions.
YOU WANT TO COLLECT POINTS FOR REWARDS
Rewards credit cards let you collect points on purchases and you can then redeem your points for awards like merchandise, travel, and gift cards. You need to check if you can earn points on all purchases or only on certain spending categories and types of purchases.
Other rewards cards are co-branded with an airline, gas company, or another major brand. These cards may offer points as well as other perks like airport lounge access.
Just be sure you plan to use your card in the way that collects points and that you like the awards offered, as these cards often come with a higher APR and an annual fee.
YOU’RE A STUDENT
If you're a student, you may qualify for a credit card that offers a low rate and no annual fee, so you have a financial safety net while you're studying and don't have much income. Just be sure you don't accumulate a lot of debt, which you'll need to pay off once you graduate.
YOU’RE A BUSINESS OWNER
You may get a credit card with a higher credit limit and other perks designed to make it easier for you to run your business and manage your finances. You may also be able to get credit cards for your employees to charge company-related expenses.
YOU HAVE BAD CREDIT OR NO CREDIT
Your credit score is a key factor in whether you qualify for a credit card and what interest rate you get. If your credit isn't in great shape or you don't have any credit history, you can apply for a secured credit card.
A secured credit card means you provide a cash deposit or use the funds in your savings account as collateral for your credit card purchases. Your credit score will begin to improve as you make regular, timely payments each month. Eventually, you'll be able to qualify for a credit card with a lower APR.
HOW CAN I APPLY FOR A CREDIT CARD ONLINE?
Applying for a credit card online is easy! Simply shop around for a credit card that matches your needs then hit the Apply Now button. Make sure you check out offers from major financial institutions as well as your local credit union.
You'll need to provide:
Your ID, proof of address, and phone number
Your Social Security number
Income information, such as W-2s, 1099s, pay stubs, and tax returns
Information about your employer
Your mortgage or rent costs
HOW DOES MY CREDIT SCORE AFFECT MY LOAN OR CREDIT CARD?
Your credit score impacts whether or not your loan is approved and what annual percentage rate (APR) you get. The higher your credit score, the lower your rate. People with excellent credit can qualify for a wide range of credit cards with more perks.
That's why it's a good idea to find out your credit score before you apply for a credit card and take any possible steps to improve your financial health. You should:
Consolidate debt into a single credit card account to boost your available credit.
Keep accounts with zero balances open to lengthen the time you've held credit.
Always pay the minimum amount due on time and try to pay more than the minimum.
CHOOSING THE BEST CREDIT CARD FOR YOU
Maybe you're still wondering, what kind of credit card should I get? If you're not exactly sure how you plan to use your credit card, your best bet is to choose a straightforward VISA Credit Card that's accepted everywhere with a great rate and no annual fee.