There are so many credit cards out there. The primary tip to finding one that works best for you is having a clear understanding of the options made available to you and asking the relevant questions to your banker. If you’ve constantly been guessing which card is the best for your credit situation and spending habits, we’ve rounded up four ways to make the best choice.
- Highlight your financial habits and needs first
Before you do anything in life, you need to know why. This helps give you the best direction forward and ultimately enables you to save both time and resources. In finances, it’s no different. As human as we are, many of us dread doing our finances. The process of assessing and reconciling your needs and wants with a budget can be very tough, whether we’re single or have others dependent on us. Sadly, financial management is a fixed part of living and is essential to our growth.
To choose the right card, ask vital questions such as do you prefer eating out or cooking at home? Do you need a no-interest period? Would you prefer a card that can waive a late payment fee on bills? By doing this, you are familiarizing yourself with your spending habits which will allow you to assess where your money goes.
To pick the best credit card, you also have to think about how you spend your money. Make honesty a priority in this process, and consider your credit history. Most developed countries work on credit scoring For example, Canadians looking for the best credit cards in Canada will have their credit history checked. Factors that determine credit suitability include outstanding debt, payment history, credit account history, etc.
- Know all the fees in advance
Be clear on the fees to be paid and how best you can get them waived. The finance world thrives on fees, especially since most clients overlook them. When searching for a card, many people are attracted to benefits such as a 2 percent cashback, totally oblivious to the high annual fees, finance charges as well as the foreign transaction, business check writing, and ATM fees. Study the market, and liaise with experts to find the best deals from financial institutions concerning their charges.
- Decide the best options that meet your financial needs
There are three significant categories of credit cards, created with three different consumers with varying needs. The first is the rewards card. This is ideal for consumers with established good credit and no debt to their name. Reward credit cards are great because they can help you pay for upcoming travel and also offset the cost of some purchases by redeeming miles or points. These cards typically offer points in common spending areas such as groceries, travel, gas, and even dining out. They’re available in all sizes and shapes and are a great addition to your financial arsenal.
The next card type is the 0% APR, made for those looking to finance new and vital purchases or those trying to come out of debt. There are no interests placed on balance transfers and acquisitions, and all the balance transfers should be completed no more than four months after your account is opened.
The last card type is a building credit card. There are cards meant to help you build your credit, and these are typically designed for people with average credit looking to improve their score. If you’re going for one or more cards, it might be best to get different types.
- Choose the card that offers you the highest value
The highest overall value is what you should be on the lookout for during your final selection stages. It’s easy to narrow down your options, but it can get a bit overwhelming when it comes to deciding between two or three cards. Study your choices and pick the ones with the highest benefits you stand to gain. Some benefits can include an automatic increase in your credit limit, a debt payoff planner, interest on your initial deposit, no expiry of your rewards, among others.