No single type of credit card or credit card company is best for everyone. Rather, there are a variety of factors that play out to determine what the best card is for the specific needs of any user. A credit card can be such a lifesaver from day to day but getting the right one is the first step to securing a healthy financial future.
Here’s a five-step process to help you identify the card that will best suit your spending habits and credit situation.
- Start with your credit score
Some credit card offers are subject to your credit score. It is important therefore that you check your score even before looking it up against the offers available with different credit card companies.
With a good credit score, you should be eligible for great credit card perks. If you check around, you should also be able to get yourself a free FICO score that some credit card issuers offer their cardholders, which can help.
- Consider your financial habits
Your spending habits will determine which card is best for you. You don’t want to end up with a wrong card simply because you didn’t really understand what you need. So, take a moment to think about how you spend money. That’s the knowledge that will help you understand what kind of card is going to benefit rather than hinder you.
- Identify which type of credit card you need
Other than the evolving forms of credit cards such as India’s first digital credit card, there are three types of credit cards in general.
- Low interest cards that save you money on interest (best for those who have credit card debt or carry a balance often).
- Rewards, or cards that earn you rewards (for cardholders who pay their bills each month).
- Secured cards that help you improve your credit when it’s damaged or limited.
Overall, the best credit card to go for is one that carries the features that meet your specific needs and financial situation.
- Scrutinize advertised offers
As a credit card user, you’ll often be bombarded with credit card offers via your bank or through the mail. While the ‘pre-approved’ offers that come through bank may be particularly appealing, don’t fall for a card simply based on its level of appeal. Take your time to do a little digging beyond the surface. What you should be interested in is not what they are telling you but rather what they are not.
It will help to find this out through your own homework to make an informed choice. Read the fine print. Find out more about the company’s rewards program. And sign up only when you’re convinced this is the best card for you.
- Use the right tools to analyze the available credit cards
It helps to also turn to available tools for analyzing credit cards so you don’t just go by the material that different banks provide directly to you or through their websites.
There is always going to be a lot of credit card offers. This is no reason, whatsoever, for you to settle for the first offer that comes through. Follow these steps and you can be sure to enjoy a happy credit card usage.